Inheritance Manager
Tax documents checklist
Checklist for Selling an Inherited Property
Inheriting a property poses complex financial and emotional questions. This checklist for selling an inherited property safely guides you through the entire process, helping you avoid costly mistakes that can account for up to 30% of the profit.
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First clarify the legal basis by applying for a certificate of inheritance and correcting the land register.
Determine the market value of the property professionally, as this forms the basis for the sale price and inheritance tax.
Check the 10-year period to avoid speculation tax and take advantage of the exemptions for private use.
Are you facing the task of selling an inherited property and feeling overwhelmed by the process? You're not alone. Every year, properties worth over 100 billion euros are inherited in Germany, and many heirs face the same challenges: unclear legal situations, complex tax issues, and the emotional burden. This guide provides you with a clear, step-by-step approach. It transforms uncertainty into a structured strategy, enabling you to make informed decisions and fully realise the value of the inheritance.
The first step after accepting the inheritance is clarifying ownership, which can take an average of 4 to 8 weeks. Apply to the competent probate court for a certificate of inheritance that identifies you as the rightful heir. This document is essential for the further process. Without a certificate of inheritance or a notarised will, a sale is not legally possible.
Subsequently, the land register must be corrected. Within two years after the inheritance, this re-registration is usually free of charge. If you miss this deadline, fees of several hundred euros may apply. A correct land register entry creates the necessary legal security for the sale and is a prerequisite for any notary. In this process, also clarify whether there are encumbrances such as mortgages or third-party rights of way. This phase lays the foundation for all subsequent steps.
If the inheritance consists of multiple people, they automatically form a community of heirs. All decisions must be made unanimously, which can slow down the process by up to 60%. Disagreement is the most common reason for delays and loss of value. One option to simplify is to grant a notarized power of attorney to one co-heir, who can then act alone.
If the heirs cannot agree, the last resort is a partition auction. In this compulsory sale, the proceeds are often 15% to 30% below the open market value. Therefore, clear, open communication is crucial. Clarify the goals of all co-heirs early on: Who wants to sell, who might want to move in themselves, or rent out? Reaching an agreement early secures family harmony and financial success. Find more on this topic in our guide Selling a House from a Community of Heirs.
A complete set of documents accelerates the sales process by several weeks and instils confidence in potential buyers. Careful preparation prevents follow-up questions and delays in the buyer's bank's financing review. Ensure that you have all documents readily available.
Here is a list of the 8 most important documents:
Current land register excerpt: Not older than 3 months.
Certificate of inheritance or notarised will: Proof of your legitimacy.
Valid energy performance certificate: Legally required; fines up to 15,000 euros may be imposed if missing.
Building plans and floor plans: Including all sections and views.
Living space calculation: Detailed breakdown of areas.
Proof of modernisation: Invoices from the past 10-15 years.
Declaration of division: Essential for condominiums.
Most recent utility bills: Provide insight into ongoing costs.
Obtaining missing documents from the authorities can take 2 to 6 weeks, so be sure to schedule this time. With complete documents, you are optimally prepared for the next phase: the property valuation.
Determining a market-oriented price is the crucial leverage for a successful sale. A price that is too high deters 9 out of 10 potential buyers, while a price that is too low can quickly lead to a loss of over 10% of possible proceeds. The market value is also the calculation basis for the inheritance tax. A professional valuation is therefore not an option, but a necessity.
A short appraisal can cost up to 500 euros, while a comprehensive, court-proof appraisal often amounts to 1.5% of the property value – that is 6,000 euros for a value of 400,000 euros. A data-driven analysis is often the faster and more cost-effective method here. Unsure what your inherited house is really worth? Use the free Auctoa ImmoGPT chat to get an initial AI-supported assessment in just 2 minutes. This objective analysis forms the perfect basis for your sales strategy.
When selling an inherited property, two types of taxes are important: inheritance tax and speculative tax. Inheritance tax is levied on the value of the inheritance, with personal allowances in place. For spouses, this is €500,000, and for children, €400,000. Anything beyond that is taxed between 7% and 30%, depending on the tax class.
Speculative tax is due on the sales profit if less than 10 years have passed between the original purchase by the deceased and the sale. However, this tax can be avoided. The most significant exception is personal use: if the deceased lived in the property in the year of sale and the two preceding years, the tax no longer applies. You can also take advantage of this rule as an heir. A short period of just 14 months can be sufficient to cover three calendar years (e.g., moving in December 2023, selling in January 2025). Check the applicable speculation deadlines carefully to avoid an unnecessary tax burden of up to 42% of the profit.
With all the documentation and a clear price target, you can now establish the sales strategy. Decide whether to sell privately or hire an estate agent. An estate agent costs between 3% and 7% of the sale price but can speed up the process by up to 50% and often achieve a 5-10% higher price. Weigh the costs against the effort and potential time savings.
Prepare the property for sale. Minor repairs and home staging can increase the sale value by up to 15%. Create a high-quality exposé with professional photos and a detailed description. A good exposé is the most important marketing tool and the foundation for marketing on online portals that over 80% of all buyers use. Any potential need for renovation should be communicated transparently to gain buyers' trust and lay the groundwork for the final steps.
The negotiation phase decides the final sale price. Be prepared for offers that are 5-10% below your desired price. Good preparation and knowledge of the market value strengthen your position. Once an agreement is reached, the buyer instructs a notary to draft the purchase contract. The notary fees are usually 1% to 1.5% of the purchase price and are typically borne by the buyer.
Carefully review the draft contract before attending the notary appointment. After signing and paying the purchase price, the key handover takes place. Create a detailed handover protocol, recording the condition of the property and all meter readings. This protects both parties from future discrepancies. With this final step, you successfully conclude the sales process.
Selling an inherited property is a marathon, not a sprint. A systematic approach, as outlined in this 7-point checklist, is the key to success. From clarifying the legal situation and reaching an agreement within the community of heirs to optimizing taxes and final handover – each step builds on the previous one. A data-based valuation and professional marketing will secure you the best possible proceeds, often 15% above the average.
The process requires care and strategic planning. Use digital tools like the Auctoa Inheritance Manager to stay organized and make informed decisions. An inherited property is more than just an asset – with the right strategy, the sale becomes a smooth and profitable conclusion to a chapter. Act informed, and you will maximize the value of your inheritance.
Wikipedia provides a comprehensive overview of inheritance law in Germany.
Finanztip offers valuable advice on inheritance tax for real estate.
The Verbraucherzentrale explains for whom an energy certificate for real estate is mandatory.
The Sparkasse describes in detail how you can request a land registry extract.
The Wirtschaftswoche explains how to apply for a land registry extract for your property.
The Handelsblatt provides information on what you should know about speculation tax before selling a property.
Which documents are absolutely necessary for the sale?
You will need at least a current land registry extract, the inheritance certificate, a valid energy performance certificate, floor plans of the property, and for condominiums, the partition declaration. Complete documentation significantly speeds up the process.
How long does the sale of an inherited property take?
The entire process can take between 6 to 12 months. The application for documents (approx. 1-2 months), marketing (approx. 2-6 months), and the transaction via the notary (approx. 1-2 months) are the main time factors.
Do I need to renovate the property before selling?
Not necessarily, but it is often advisable. Minor cosmetic repairs or home staging can increase the sale price by 5-15% and shorten the sale time. However, transparent communication about the condition is the most important.
Who covers the costs upon sale?
As a seller, you usually bear the costs for the estate agent's commission (often shared with the buyer), procurement of documents, and any repairs. The notary costs and the land transfer tax are typically covered by the buyer.
What is the difference between inheritance tax and speculation tax?
Inheritance tax relates to the wealth you inherit. Speculation tax refers to the profit you make if you sell this wealth (the property) within a certain period.
Can I sell without an estate agent?
Yes, a private sale is possible and saves estate agent fees. However, it requires a significant amount of time, market knowledge, and organizational skills for creating the listing, conducting viewings, and negotiating prices.
