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Calculate inheritance tax for real estate online in advance
Facing an inheritance of property and worried about high taxes? Many heirs pay more than necessary because they do not know the true value of their property. This article shows you how to calculate the inheritance tax for your property online in advance and how accurate valuation can help you save up to 30% of the tax office’s claims.
With access to Google, BORIS, and Deep Research.
The market value of the property is the biggest lever for reducing inheritance tax; you should always critically examine a broad valuation by the tax office.
Depending on the degree of kinship, you are entitled to tax-free allowances ranging from €20,000 to €500,000, which directly reduce your tax burden.
A qualified counter-expertise is recognised by the tax office and can reduce the property value and thus the tax claim by up to 30%.
The inheritance of a property is often accompanied by emotional and financial uncertainties. One of the biggest concerns is the demand from the tax office, as inheritance tax can quickly reach five- or six-figure sums. The good news: The initial calculation by the tax office is not set in stone. The key factor in reducing your tax burden is the accurately determined market value of the property. A data-driven analysis can reveal deviations of 20% or more compared to the authorities' blanket estimate. In this article, you will learn how to calculate your expected tax burden yourself and what strategic steps you can take to secure your inheritance in the best possible way.
Calculating the inheritance tax for a property is based on three central factors enshrined in the Inheritance and Gift Tax Act (ErbStG). First, the market value of the property is taken as a basis. Secondly, your degree of relationship to the deceased determines your tax class, which ranges from I (close relatives) to III (non-relatives). Thirdly, your personal allowance is deducted from the market value; this varies significantly depending on the tax class. The tax rates applied to the remaining amount range from 7% in tax class I to 50% in tax class III. A thorough understanding of these three pillars is the first step towards calculating the inheritance tax and avoiding unnecessary payments. These elements crucially determine the level of financial burden.
The tax office often determines the value of your inherited property using standardized mass procedures such as the comparative value or cost value methods. These blanket evaluations can exceed the actual market value by 15% to 20%, directly leading to a higher tax demand. However, the value set by the tax office is not a final judgment. You have the right to prove a lower, more realistic value through an independent market value appraisal. A reduction in value of just €50,000 can lower your tax burden by over €5,000, depending on the tax rate. Find out what your inherited house is worth to establish a solid negotiating base. Having an accurate knowledge of the property's value is thus your most important tool in managing the amount of tax you pay.
Your degree of kinship to the deceased assigns you to one of three tax classes, which determines the amount of your personal allowance and the applicable tax rate. A correct classification is essential for calculation. Here are the main allowances according to § 16 of the German Inheritance Tax Act:
€500,000 for spouses and registered civil partners (Tax Class I)
€400,000 for children and stepchildren (Tax Class I)
€200,000 for grandchildren (Tax Class I)
€100,000 for parents and grandparents in the case of inheritance (Tax Class I)
€20,000 for all other heirs, including siblings, nieces, nephews, and unrelated persons (Tax Classes II and III)
These allowances can be utilised again every 10 years in the case of gifts, allowing for long-term estate planning. Learn about ways to legally avoid inheritance tax to protect your wealth. Correct application of these allowances is a crucial step in the calculation.
With the right figures, you can estimate your anticipated inheritance tax yourself. Such a preliminary calculation protects you from surprises and offers you planning certainty. Proceed as follows:
Determine market value: Ascertain the realistic market value of the property. A professional online valuation from Auctoa provides a quick and data-based foundation for this.
Deduct allowance: Subtract your personal allowance (e.g. €400,000 for a child) from the market value.
Calculate taxable amount: The result is the taxable acquisition.
Apply tax rate: Multiply the taxable amount by the tax rate applicable to your tax class (e.g., 11% for a child on a value up to €600,000).
An example: A son inherits a house valued at €650,000. After deducting the allowance of €400,000, €250,000 remains. At a tax rate of 15%, the tax amounts to €37,500. A precise valuation that reduces the value to €600,000 would already lower the tax by €7,500. Use our inheritance tax calculator for an initial assessment. This calculation demonstrates the importance of precise values.
Online calculators are useful tools for initial guidance, but they cannot replace a professional appraisal. They often do not take into account individual features such as a backlog of renovations, construction defects, or third-party rights (e.g. a right of residence), which can significantly reduce the value. The tax office only accepts proof of a lower market value if it is supported by a qualified appraisal according to § 198 BewG. Such a counter-appraisal can reduce the tax assessment by 20-30%. Therefore, investing around 0.5% of the property's value in an appraisal pays off quickly. Understand the role of the appraisal in inheritance to strengthen your position with the tax office. A detailed appraisal is the basis for further strategic planning.
In addition to challenging the market value, there are other recognized methods to reduce inheritance tax. One of the most effective is the use of tax exemption for the so-called family home. If the spouse or a child inherits the property used by the deceased and lives in it for at least 10 more years, the inheritance tax is completely waived. For children, there is a limit of 200 square meters of living space. Another option is making lifetime gifts, as the allowances can be fully utilized again every 10 years. For rented properties, the legislator also grants a standard valuation deduction of 10%, so only 90% of the value is relevant for taxation. Are you unsure which strategy is right for you? The Auctoa ImmoGPT chat offers you a free and non-binding initial analysis of your situation. The right strategy can reduce your tax burden to zero.
Calculating the inheritance tax for a property online in advance is the first step to significant cost savings. The key is to proactively verify and correct the often overestimated market value set by the tax office with a data-driven appraisal. A reduction in the property value by just 10% can already mean tax savings of several thousand euros. Make use of your legal options, from allowances to special regulations such as the family home. Act based on data, not the first notification from the tax office – your wealth will thank you.
Bundesfinanzministerium provides comprehensive information on inheritance and gift tax.
Haufe examines planned tax changes for 2025, including adjustments to real estate transfer and inheritance tax.
Bundesfinanzministerium explains the application of valuation regulations for real estate within the context of inheritance and gift tax.
Statistisches Bundesamt (Destatis) releases a press statement with up-to-date data.
Statistisches Bundesamt (Destatis) offers an overview of publications on the subject of inheritance tax.
Wikipedia provides a comprehensive article on inheritance tax in Germany.
Deutsche Bundesbank provides statistics on real estate and construction service prices.
Deutsche Bundesbank analyses the decline in residential property prices in 2023 and the pressure on rents.
Gesetze im Internet offers the full text of the Inheritance and Gift Tax Act (ErbStG).
What can I do if I can't immediately pay the inheritance tax?
Under certain conditions, you can apply for a deferral of the tax with the tax office. This is particularly possible if immediate payment would require the sale of the inherited property. A deferral can be granted for up to ten years.
For an inheritance community, is the allowance applied individually to each person?
Yes. In an inheritance community, the value of the property is divided among the heirs. Each heir can then apply their individual allowance to their share. This can significantly reduce the community's overall tax burden.
What valuation date does the tax office use for the property?
For the valuation of the property and the calculation of inheritance tax, the date of death of the deceased is always the decisive date. Increases or decreases in value after this date are irrelevant for tax calculation.
Does a right of residence entered in the land register reduce the inheritance tax?
Yes, a lifelong right of residence or usufruct reduces the market value of the property, as it limits its use and exploitation. The value of this encumbrance is capitalized and deducted from the market value, leading to a lower inheritance tax.
Is the same tax applied to a gift as to an inheritance?
Yes, the tax rates and allowances for gifts are generally identical to those for inheritances under the Inheritance and Gift Tax Act (ErbStG). The significant advantage of a gift is that the allowances can be used anew every 10 years.
What is the difference between market value and standard value?
The market value (or 'common value') is the current market value of the property and the basis for the inheritance tax. The standard value is an outdated, purely fiscal metric that is only used for property tax and is significantly lower than the market value.
