Are you facing the complex task of selling an inherited property? This process involves tax pitfalls and organisational hurdles that can reduce the proceeds by up to 20%. We guide you through the entire process in 7 clear steps, helping you make informed decisions and achieve the best possible price.
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The topic briefly and concisely
Apply for the land register correction within two years after the inheritance to save fees of several hundred euros.
In an inheritance community, all co-heirs must agree to the sale; a division auction often results in proceeds that are up to 20% below market value.
The speculation tax is waived if more than 10 years have passed between the purchase by the deceased and the sale, or if the property was used for personal purposes in the last three years.
The sale of an inherited property is often an emotional and financial challenge. Not only do you need to realise the value of an estate, but you also must comply with complex legal and tax requirements. A wrong decision can quickly lead to financial losses of several tens of thousands of euros. This guide provides you with a structured overview of the entire process involved in selling an inherited property. It serves as your digital compass, helping you to avoid common mistakes, correctly assess the value, and manage the sales process confidently from start to finish.
Step 1: Establish legal foundations – Certificate of inheritance and land register
Before the sales process can begin, you must unequivocally prove your ownership. This is usually done through a certificate of inheritance, which you apply for at the relevant probate court. Alternatively, a notarised will with an opening protocol is also recognised. The application for the certificate of inheritance can take between 4 and 12 weeks, depending on the court's workload.
Subsequently, the land register needs to be updated to record you as the new owner. If you apply for the land register correction within two years of the inheritance, this process is free of charge. If you miss this deadline, costs will be incurred, which for a property value of €250,000 can already amount to approximately €450. Only with the correct land registry entry are you fully capable of selling.
Step 2: Managing the Community of Heirs – Unanimity as a Success Factor
If multiple people inherit together, they form an inheritance community. This setup can be prone to conflict as all decisions must be made unanimously. A study shows that over 30% of all inheritance disputes flare up around real estate. For a sale, this means: Every single co-heir must agree to the sale.
The following solutions are common in an inheritance community:
Joint sale: All heirs agree to the sale and share the proceeds according to their inheritance share.
Payment to a co-heir: One heir wishes to keep the property and pays off the other co-heirs. An accurate valuation is essential for this.
Partition auction: If the heirs cannot agree, any co-heir can request a public auction to dissolve the community. However, this often results in proceeds that are 15-20% below the open market value.
Clear communication and a neutral valuation of the inheritance community property are crucial to avoid the financially disadvantageous path of a partition auction.
Step 3: Analyse and minimise tax burden
Inheritance Tax: Make the Most of Personal Allowances
Regardless of the sale, inheritance tax is levied on the value of the estate once the legal allowances are exceeded. The amount of these allowances depends directly on the degree of kinship to the deceased. Spouses benefit from the highest allowance of €500,000. Children have an allowance of €400,000, while grandchildren can inherit €200,000 tax-free. Siblings or nephews have only an allowance of €20,000. A precise assessment of the market value is therefore crucial to calculate the tax burden correctly and avoid overpaying the tax office.
Capital Gains Tax: The Ten-Year Rule as a Key Metric
Additionally, capital gains tax may be incurred upon sale. This applies if less than ten years have passed between the original purchase by the deceased and the current sale. The tax is payable on the capital gain and is based on your personal income tax rate, which can be up to 45%. However, there is an important exception: if the deceased lived in the property exclusively during the year of sale and the two preceding years, the capital gains tax does not apply, even if the ten-year period has not yet expired.
Step 4: Determine the comprehensive market value – The foundation for your success
What is your inherited property's true value? A realistic price estimate is the linchpin of the entire sales process. Too high a price deters interested parties and extends the marketing period by an average of 50%. Too low a price means a direct financial loss. Professional appraisals often differ by 20-30% from purely online estimates.
For initial guidance, you can use our ImmoGPT chat to quickly obtain a data-driven assessment. However, for selling and for submission to the tax office, a detailed property valuation is essential. It provides you with a solid negotiating basis and ensures you meet tax requirements. This valuation takes into account over 100 factors such as location, condition, features, and current market data.
Step 5: Prepare the property for sale – Unlock value potential
First impressions matter and can significantly influence the sale price. A tidy and appealingly presented property sells on average 15% faster. Therefore, invest time in preparation, which includes not only decluttering personal items but also making minor repairs.
The following measures have been proven to increase value:
Home Staging: A professional staging of the rooms can raise the sale price by 5-15%.
Minor Repairs: Functioning light switches and drip-free taps indicate a well-maintained condition.
Professional Photos: High-quality images in the listing can increase the number of viewing requests by up to 60%.
Garden Maintenance: A well-kept outdoor area is an important criterion for over 70% of buyers.
If it is a renovation-needed house, transparent communication about the condition is crucial. A structural survey can provide clarity for both parties and speed up the sales process.
Step 6: Establish sales strategy and start marketing
Now begins the active phase of sales. You need to decide whether to conduct the sale privately or hire an estate agent. An experienced agent can often achieve a 5-10% higher selling price through their network and negotiation skills, even after deducting the typical 3.57% commission for the seller. The sales process itself comprises several stages, from creating the property description to negotiation.
A detailed checklist for the sale helps maintain an overview. Important documents such as the energy certificate, current land register extracts, and building plans must be available for potential buyers. A professionally created property description with all relevant key figures and high-quality photos is the foundation for successful marketing on the major real estate portals used by over 90% of buyers.
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Once you have agreed on a price with a buyer, the sale is legally formalised by a notary. The notary acts as a neutral party and drafts the purchase contract. This process usually takes 1-2 weeks. Carefully review the draft contract before attending the notarisation appointment. The notary and land registry costs amount to approximately 1.5% to 2.0% of the notarised purchase price and are typically borne by the buyer.
After signing, the notary arranges for the pre-registration of ownership in the land register and informs the buyer once the purchase price is due. The purchase price is paid directly into your account, not through the notary. Only after full payment is the handover of keys and the final transfer of ownership in the land register completed. With that, the process of selling your inherited property is successfully concluded.
Conclusion: A structured process is the key to success
Which documents do I need for the sale?
You need a current land registry excerpt, the energy certificate, floor plans, a living space calculation, the certificate of inheritance or a notarial will, the declaration of division for apartments, as well as the minutes of the last homeowners' meetings.
What happens if the inherited property is still burdened with debts?
You inherit not only assets but also debts. Existing mortgage debts are settled with the sale proceeds. The notary ensures that the deceased's bank receives its money before you receive the rest of the proceeds.
Sell or rent – which is more sensible?
This decision depends on your personal and financial situation. A sale provides quick capital, while renting ensures long-term income. A Sell-or-Rent calculator can help compare the financial pros and cons based on rental income, costs, and potential sale proceeds.
How is the property's value determined for inheritance tax?
The tax office usually determines the value using standardized methods, which may diverge from the actual market value. If the tax office's estimate is too high, you can demonstrate a lower, more realistic value with an independent market value appraisal from a certified expert to save on taxes.
Is speculative tax applicable if I live in the house after inheritance?
If you move into the property after inheritance and have continuously used it yourself in the year of sale and the two preceding years, the speculative tax is waived. The 10-year period does not need to be waited out.
What is the difference between a certificate of inheritance and a will?
A will is the declaration of intent of the deceased. A certificate of inheritance is an official document issued by the probate court that confirms who has become heir and the size of their inheritance share. It serves as official proof in legal transactions, for example, with the land registry office.
Additional useful links
Statistisches Bundesamt offers comprehensive information on construction prices and real estate price indices.
Statistisches Bundesamt provides detailed tables on house and land prices.
Statistisches Bundesamt publishes press releases on current developments in real estate prices.
The Bundesfinanzministerium offers official information on inheritance and gift tax.
Wikipedia offers a comprehensive article on inheritance tax in Germany.
The Bundesnotarkammer informs about the legal aspects of inheritance and gifting.
The Justizministerium Nordrhein-Westfalen explains the legal succession.
The Tagesschau sheds light on inheritance disputes in the context of the real estate crisis.
FAQ
What documents do I need for the sale?
You need a current land registry extract, the energy certificate, floor plans, a calculation of living space, the certificate of inheritance or a notarised will, for condominiums the declaration of division, as well as the minutes of the last owners' meetings.
What happens if the inherited property is still burdened with debt?
You inherit not only the assets but also the debts. Existing mortgages are settled with the proceeds of the sale. The notary ensures that the deceased's bank receives its money before you receive the remainder of the proceeds.
Sell or rent – which is more sensible?
This decision depends on your personal and financial situation. Selling provides quick capital, whereas renting ensures long-term income. A <a href="/blog/geerbtes-haus-verkaufen-oder-vermieten-rechner">Sell or Rent Calculator</a> can help compare the financial pros and cons based on rental income, costs, and potential sale proceeds.
How is the value of the property determined for inheritance tax?
The tax office usually determines the value based on standardized procedures, which may differ from the actual market value. If the tax office's estimate is too high, you can demonstrate a lower, more realistic value through an independent appraisal from a certified expert and thus save on taxes.
Is there speculative tax if I live in the house myself after inheriting it?
If you move into the property yourself after inheriting it and have used it continuously in the year of sale as well as the two preceding years, the speculative tax is not applicable. The 10-year period does not need to be waited upon.
What is the difference between a certificate of inheritance and a will?
A will is the testator's declaration of intent. A certificate of inheritance is an official document issued by the probate court that confirms who has become an heir and the size of their inheritance. It serves as official proof in legal transactions, such as with the land registry office.
