Inheritance Manager
Real Estate Legal Information
Inherited parental home: sell or move in yourself
Inheriting the family home is more than a financial transaction – it is an emotional dilemma. Are you facing the decision to sell or move in yourself? This article provides you with a data-driven analysis to make the best choice financially and personally.
With access to Google, BORIS, and Deep Research.
Check the inheritance tax: Children are entitled to an exemption of €400,000 per parent; a professional evaluation provides clarity here.
Be mindful of the speculation period: A sale is often tax-free if the deceased had previously lived in the property themselves or if it had been in their possession for over 10 years.
Estimate renovation costs realistically: Moving in can quickly require investments of over €50,000 due to requirements of the Energy Savings Act (GEG) and the need for modernization.
Holding the keys to your parental home in your hands means responsibility. Suddenly, you are faced with one of the most consequential decisions of your life: Should you sell the inherited house or move in yourself? This choice is rarely simple and is accompanied by financial realities, tax pitfalls, and deep emotions. A wrong decision can cost you tens of thousands of euros or lead to years of regret. This guide offers you a structured, fact-based analysis. We highlight the three core scenarios – selling, personal use, and renting – and provide you with the tools to make a safe and informed decision.
Before emotions take over, a sober assessment is essential. The first step is to clarify the inheritance tax. For children, there is a personal tax allowance of 400,000 euros per parent. If the inherited property value is below this, no inheritance tax is due. Anything exceeding this allowance is taxed at a rate of 7% to 30%. Therefore, a professional and swift property valuation is not a luxury, but a necessity to gain financial clarity. Only with a realistic market value can you accurately calculate the tax burden and set the course for the next steps properly. With a solid valuation of your inherited house, you lay the foundation for all further considerations.
This initial analysis protects you from unpleasant surprises and serves as the basis for weighing the various scenarios.
Selling the family home promises quick liquidity but comes with costs. Expect notary fees of around 1.5% of the purchase price and broker commissions, which vary depending on the federal state. A crucial factor is the speculative tax, which applies if less than ten years have passed between the purchase by the testator and the sale by you. However, the tax can be avoided: If the testator lived in the property during the year of sale and the two preceding years, you are exempt from tax on the sale. This regulation is a significant advantage for many heirs. Therefore, a thorough review of the ownership and usage duration is essential. A detailed checklist for selling property helps you keep track of all items.
Consider the following cost points in your calculations:
Notary fees: Approximately 1.5% of the certified purchase price.
Land registry costs: Approximately 0.5% of the purchase price, often included in notary fees.
Broker commission: Usually between 3.57% and 7.14% of the sale price, depending on the region.
Cost for the energy performance certificate: Depending on the type, between 100 and 500 euros.
Possible speculative tax: Based on your personal income tax rate.
Once the financial aspects of the sale are clear, the alternative comes into focus: moving in yourself.
Moving into your parents' house is often the most emotionally compelling wish. However, this path requires a realistic assessment of the property's condition. Especially with older houses, renovation costs can quickly add up. An energy-efficient renovation according to the Building Energy Act (GEG) may be mandatory when you, as the new owner, move in. Core renovation costs can range from 1,200 to 2,500 euros per square meter. Even just renewing the windows and heating system can quickly exceed 50,000 euros. These investments need to be financed and should be weighed against the benefits. A thorough analysis of whether a property needing renovation is a burden or an opportunity is crucial.
Typical renovation measures often include:
Insulation of the roof or top floor ceiling (Cost: 30-100 €/sqm).
Renewal of the heating system (mandatory after 30 years for constant temperature boilers).
Modernisation of the electrical system (around 100-150 €/sqm).
Replacement of old windows (starting from 500 € per window).
Bathroom renovation (from 10,000 euros and upwards).
But what if neither selling nor personal use is the right solution? Then renting could be a third option.
Renting out the parental home seems like an attractive option for generating ongoing income while keeping the property in the family. A solid net rental yield in Germany should be at least 3.5% to 4% to be considered profitable. For a property valued at 400,000 Euros, you should aim for an annual cold rent of at least 14,000 Euros. However, the responsibilities of a landlord are often underestimated. Non-recoverable costs for maintenance and management can quickly reduce the yield by 15-25%. Additionally, you bear the full risk of rental defaults. The decision on whether the pros and cons of selling do not outweigh should be made carefully. For many heirs, the administrative burden is a reason to opt for selling.
Renting becomes particularly complex when several people inherit and form an inheritance community.
If several people inherit jointly, an inheritance community is formed. All important decisions, such as selling or renting, must be made unanimously. This poses considerable potential for conflict, as the financial situations and emotional attachments of the co-heirs often differ greatly. If just one heir blocks a decision, the community becomes unable to act. Statistically, over 50% of inheritance disputes arise in connection with real estate. Clear communication and neutral moderation are crucial here. One option is for one heir to buy out the others and become the sole owner. However, this requires agreement on the value and financial capability of the buyer. An external, data-based decision-making aid for inheritance communities can help to avoid disputes and find a solution that is fair for everyone.
The greatest challenge is often not financial, but the emotional dimension of the decision.
The question of whether to sell your inherited parental home or move in yourself cannot be answered uniformly. Selling offers financial freedom and a clear conclusion, whereas moving in represents an emotional investment with potentially high renovation costs. Renting is a compromise that involves significant administrative effort. Your final decision should rest on a solid foundation of three pillars: an objective property valuation, a clear analysis of the tax implications, and an honest reflection of your personal life planning. Use tools like Auctoa ImmoGPT to swiftly address initial questions or obtain a non-binding appraisal to replace speculation with facts. A well-informed decision is always the best decision.
Statistisches Bundesamt (Destatis) offers information on construction prices and the property price index in Germany.
Bundesministerium der Finanzen provides information on inheritance and gift tax in Germany.
Statistisches Bundesamt (Destatis) supplies a table on home ownership rates in Germany.
ZIA (Zentraler Immobilien Ausschuss) publishes the spring report of the real estate industry in Germany.
Deutsche Bundesbank offers statistics on real estate and construction service prices in Germany.
DIW (Deutsches Institut für Wirtschaftsforschung) analyses the development of purchase prices in the housing market in 2024.
Selling or Moving In: Which is Financially Wiser?
This depends on three factors: 1. The need for renovation – high costs can make moving in unfeasible. 2. Your tax burden – check inheritance and speculation taxes. 3. The market value – a high sale price can be more financially attractive than the emotional return of moving in. A data-driven evaluation is the first step to finding the answer.
What happens if the inheritance group can't agree?
If a unanimous decision cannot be made, there is a risk of a deadlock. Solutions include mediation, buying out one heir by the others, or as a last resort, a partition auction. The latter often leads to financial losses and should be avoided.
How quickly do I need to decide after inheriting?
You have six weeks to disclaim the inheritance. There is no fixed deadline for deciding on selling or personal use. However, it is advisable to act promptly to minimize ongoing costs (property tax, insurance) and to meet renovation obligations (2-year deadline upon change of ownership).
Can I rent out my inherited house instead of selling it?
Yes, renting is an option. You should aim for a net rental return of at least 3.5%. However, keep in mind the management effort, maintenance costs, and the risk of rent defaults. Often, selling is the simpler and financially clearer solution.
What role does the energy certificate play in the sale?
The energy certificate is legally required for the sale and must be presented to potential buyers at the latest during the viewing. The costs range between 100 and 500 euros, depending on the type of certificate. If it is missing, fines may be imposed.
How can Auctoa help me with the decision?
Auctoa offers a fast, AI-supported, and neutral property valuation. This provides you with a solid, data-based foundation to objectively assess the financial implications of your decision – whether selling, moving in, or renting out – and to find the best path for your situation.
