Inheriting a property presents you with complex financial and emotional questions. This checklist for selling an inherited property safely guides you through the entire process. It helps you avoid costly mistakes that can account for up to 30% of the profit.
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The topic briefly and concisely
First clarify the legal foundations 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 speculative tax and use the exemptions for owner-occupancy.
Are you facing the task of selling an inherited property and feel overwhelmed by the process? You are 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 emotional strain. This guide provides you with a clear, step-by-step approach. It turns uncertainty into a structured strategy, enabling you to make informed decisions and fully realise the value of the inheritance.
Step 1: Establish legal foundations – Certificate of inheritance and land register
The first step after accepting the inheritance is to clarify the ownership details, which can take on average 4 to 8 weeks. Apply for a certificate of inheritance at the relevant probate court, which identifies you as the legitimate heir. This document is essential for the further process. Without a certificate of inheritance or notarial will, a sale is legally not possible.
Afterwards, the land register must be corrected. Within two years after the inheritance, this transfer is usually free of charge. If you miss this deadline, fees of several hundred euros may apply. A correct land register entry provides the necessary legal certainty for the sale and is a prerequisite for any notary. In this process, also clarify whether there are encumbrances such as mortgages or easements by third parties. This phase lays the foundation for all further steps.
Step 2: Reach an agreement within the community of heirs
If the inheritance consists of several people, they automatically form a community of heirs. All decisions must be made unanimously here, 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 issue a notarized power of attorney to a co-heir, who can then act alone.
If the heirs cannot agree, partition auction looms as a last resort. In this forced sale, the proceeds often lie 15% to 30% below the free market value. Therefore, clear, open communication is crucial. Clarify the goals of all co-heirs at an early stage: Who wants to sell, who might want to move in themselves or rent out? Reaching an early agreement ensures family harmony and financial success. You can find more on this topic in our guide House Sale from Heir Community.
Step 3: Gather all necessary sales documents
A complete set of documents accelerates the sales process by several weeks and instils confidence in potential buyers. Careful preparation prevents queries and delays during the financing approval process by the buyer's bank. Ensure that you have all the documents ready at hand.
Here is a list of the 8 most important documents:
Current land register extract: No older than 3 months.
Certificate of inheritance or notarised will: Proof of your legitimacy.
Valid energy certificate: Legally required, fines of up to 15,000 euros may apply if missing.
Building plans and floor plans: Including all sections and views.
Living space calculation: Detailed breakdown of the areas.
Proof of modernisations: Invoices from the last 10-15 years.
Declaration of division: Essential for condominiums.
Recent utility bills: Provide insight into ongoing costs.
Obtaining missing documents from the authorities can take 2 to 6 weeks, so be sure to plan this time accordingly. With complete documentation, you are optimally prepared for the next phase: the property valuation.
Step 4: Determine the realistic market value of the property
Setting an appropriate market price is the key lever for a successful sale. An excessively high price deters 9 out of 10 prospective buyers, while a too low price quickly leads to a loss of over 10% of potential proceeds. The market value is also the basis for calculating inheritance tax. A professional valuation is therefore not an option, but a necessity.
A short appraisal can cost up to 500 Euros, whereas a comprehensive, court-proof appraisal often accounts for 1.5% of the property's value – that is, 6,000 Euros for a value of 400,000 Euros. A data-driven analysis is often the quicker and more cost-effective route 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.
Step 5: Check tax obligations and deadlines
When selling an inherited property, two types of tax are relevant: inheritance tax and speculative tax. Inheritance tax is levied on the value of the inheritance, with personal allowances applicable. For spouses, this is 500,000 Euros, and for children, it's 400,000 Euros. Anything above this is taxed at a rate of between 7% and 30%, depending on the tax bracket.
The speculative tax applies to the profit from the sale 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 important exception is personal use: If the deceased occupied the property in the year of sale and the two preceding years, the tax is waived. As an heir, you can also take advantage of this rule. A short period of just 14 months may be sufficient to cover three calendar years (e.g., move-in in December 2023, sale in January 2025). Check the applicable speculation deadlines carefully to avoid an unnecessary tax burden of up to 42% of the profit.
Step 6: Define the right sales strategy
With all the necessary documents and a clear pricing goal, you can now establish your sales strategy. Decide whether to sell privately or engage an estate agent. An agent costs between 3% and 7% of the sale price, but they can speed up the process by up to 50% and often achieve a 5-10% higher price. Weigh the costs against the effort and the 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 brochure with professional photos and a detailed description. A good brochure is the most important marketing tool and the basis for advertising on online portals, which are used by over 80% of buyers. Any potential need for renovation should be communicated transparently to gain buyers' trust and lay the foundation for the final steps.
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The negotiation phase determines the final selling price. Be prepared for offers that are 5-10% below your desired price. Good preparation and knowledge of the market value will strengthen your position. Once an agreement is reached, the buyer commissions a notary to draft the sales contract. Notary fees are typically 1% to 1.5% of the purchase price and are usually borne by the buyer.
Carefully review the draft contract before attending the notary appointment. After signing and paying the purchase price, the handover of keys takes place. Create a detailed handover protocol documenting the condition of the property and all meter readings. This protects both parties from future discrepancies. With this final step, you successfully complete the sales process.
Conclusion: Achieving successful sales with structure and data
What documents are essential for selling?
You will need at least a current land register extract, the certificate of inheritance, a valid energy certificate, property floor plans, and for condominium sales, the partition declaration. Complete documentation significantly accelerates the process.
How long does it take to sell an inherited property?
The entire process can take between 6 and 12 months. The application for documents (about 1-2 months), marketing (about 2-6 months), and processing through the notary (about 1-2 months) are the main time factors.
Do I have to renovate the property before selling?
Not necessarily, but it is often recommended. Minor cosmetic repairs or home staging can increase the sale price by 5-15% and reduce the selling time. However, transparent communication about the condition is most important.
Who pays the costs in the sale?
As a seller, you typically bear the costs for the broker's commission (often shared with the buyer), document procurement, and any repairs. The notary fees and land transfer tax are usually paid by the buyer.
What is the difference between inheritance tax and speculation tax?
Inheritance tax applies to the wealth you inherit. Speculation tax relates to the profit you make if you sell this asset (the property) within a certain period.
Can I conduct the sale without an estate agent?
Yes, a private sale is possible and saves estate agent fees. However, it requires considerable time, market knowledge, and organisational skills for creating the exposé, conducting viewings, and negotiating prices.
Additional useful links
Wikipedia offers a comprehensive overview of inheritance law in Germany.
Finanztip provides valuable advice on inheritance tax for real estate.
The Verbraucherzentrale explains who is required to have an energy certificate for properties.
The Sparkasse describes in detail how you can request a land register excerpt.
The Wirtschaftswoche explains how to apply for a land register excerpt for your property.
The Handelsblatt provides information on what you should know about capital gains tax before selling a property.
FAQ
What documents do I absolutely need for the sale?
You will need at least a current extract from the land register, the certificate of inheritance, a valid energy performance certificate, the property's floor plans, and in the case of condominiums, the declaration of division. Complete documentation significantly speeds up the process.
How long does it take to sell an inherited property?
The entire process can take between 6 and 12 months. Applying for the documents (approx. 1-2 months), marketing (approx. 2-6 months), and completion through the notary (approx. 1-2 months) are the biggest time factors.
Do I need to renovate the property before selling it?
It's not mandatory, but it's often advisable. Minor cosmetic repairs or home staging can increase the sale price by 5-15% and shorten the selling time. However, transparent communication about the condition is most important.
Who pays the costs when selling?
As a seller, you are typically responsible for the costs of the agent's commission (often shared with the buyer), obtaining documents, and any repairs. The notary fees and land transfer tax are usually paid by the buyer.
What is the difference between inheritance tax and capital gains tax?
Inheritance tax refers to the assets you inherit. Capital gains tax refers to the profit you make if you resell these assets (the property) within a certain time frame.
Can I complete the sale without an estate agent?
Yes, a private sale is possible and saves on agent fees. However, it requires a significant investment of time, market knowledge, and organizational skills for creating the exposé, conducting viewings, and negotiating the price.
