Inheritance Manager
Heirs' community moderation
sell inherited property to a co-heir
Have you jointly inherited a property and one co-heir wants to take it over? This step involves financial and legal hurdles that can quickly lead to costly conflicts without a clear plan. We show you how to structure the sales process in five steps to ensure a fair outcome for all parties involved.
With access to Google, BORIS, and Deep Research.
An impartial market value appraisal is the essential foundation to avoid price disputes and establish a fair payout sum.
The sale to a co-heir must be legally secured through a notarised partition agreement; the costs for this amount to approximately 1.5-2.0% of the property's value.
No real estate transfer tax is incurred during the transfer within the community of heirs, and the speculative tax can be avoided under certain conditions.
The sale of an inherited property to a co-heir is one of the most common yet complex tasks for a community of heirs. While the desire to keep the property within the family is understandable, implementation often fails due to differing price expectations and unclear legal conditions. Disagreements can quickly lead to blockages, which, in the worst-case scenario, result in a devaluation through a forced auction. This guide offers you a clear, data-based strategy to make the sales process transparent and efficient. This way, you ensure that the property's value is objectively determined and that the sale is legally secure and tax-optimised for all parties involved.
When multiple people inherit, they automatically form a community of heirs according to § 2038 BGB. This body collectively manages the estate, and all important decisions, such as the sale of a property, require 100% unanimity. Even a single dissenting vote can block the entire process. Statistics show that over 60% of all inheritance disputes involve real estate, highlighting the need for a clear strategy. Before a sale to a co-heir is even conceivable, all heirs must be registered as new owners in the land register, which is possible free of charge within two years of inheritance. Reaching an early agreement on the approach is therefore not just advice, but an economic necessity. The right decision-making assistance for communities of heirs is always based on a solid data foundation. This first step ensures that everyone operates on the same information basis before addressing the central question of value.
The most common cause of conflicts is the question: What is the property really worth? Emotional attachments or varying market knowledge often lead to price expectations that differ by up to 30%. An independent market value appraisal is therefore the most important investment in a smooth process. It neutralizes the debate and provides an indisputable numerical basis for the payment to other heirs. For a quick, data-driven assessment, you can conduct an initial analysis with our ImmoGPT chat or directly request an AI-assisted valuation that precisely evaluates current market data. An appraisal accepted by all parties accelerates the agreement by an average of 50%. The valuation takes into account all relevant factors:
Location and infrastructure of the property
Year of construction, condition, and need for renovation
Living area and plot size
Current comparative prices for similar properties in the area
Energy condition and valid energy certificate
A clearly defined value is the prerequisite to fairly determine the value of an inherited house. With this fixed value in hand, the next step, the legal structuring of the sale, can be tackled.
If the purchase price is fixed by the appraisal, the transfer is documented in a settlement agreement. This contract governs the dissolution of the heir community regarding the property and must necessarily be notarised to be legally binding. The notary fees usually amount to 1.5% to 2.0% of the notarised property value and are typically borne by the purchasing co-heir. A common misunderstanding concerns the pre-emption right: The statutory pre-emption right for co-heirs according to § 2034 BGB only applies if an heir sells their *share* to an external third party. When the entire property is sold by the heir community to a co-heir, there is no such pre-emption right. The contract creates clear circumstances and is the basis for the change of ownership in the land register. A proper contractual arrangement is the cornerstone of any checklist for property sales. Once the ink is dry, the financial aspect of taxes comes into focus.
Selling to a co-heir offers significant tax advantages. The most important point: No real estate transfer tax is levied, as the acquisition is in a direct line to dissolve the co-ownership, which means a saving of 3.5% to 6.5% of the purchase price. Inheritance tax has already been levied on the inherited share itself and is not triggered again by the internal sale. The decisive factor is speculation tax: it is due if less than ten years have passed between the purchase by the deceased and the sale by the heirs. However, a ruling by the Federal Fiscal Court in 2023 clarified that the acquisition of co-heirs' shares is not considered a classic acquisition transaction in terms of the speculation period. This significantly reduces the risk of an unexpected tax burden. Nonetheless, a careful examination of the timelines is essential. Use our inheritance tax calculator for initial guidance. Resolving these tax issues is critical before the purchasing heir addresses financing the payout amount.
The heir taking over must pay the other heirs according to their share of the inheritance. It is rare for these sums to be available from own funds, making property financing necessary. Banks meticulously evaluate such applications and require a current, plausible market value appraisal as a key document. A professionally prepared appraisal, such as the one offered by Auctoa, can accelerate the loan approval process by up to 30% as it provides the bank with the necessary assurance about the property's value. The payment amount is calculated from the market value minus the buyer's own inheritance share. An example: For a value of €400,000 and four heirs with equal shares (each €100,000), the buyer must pay €300,000 to his three co-heirs. Selling at a discount to relatives is not a solution here, as the tax office might regard the difference as a gift and tax it. Solid financing is the penultimate step to successfully conclude the process and prevent the worst-case scenario.
If the heirs absolutely cannot agree, any co-heir can apply for a partition auction at the competent local court at any time. This procedure is a form of compulsory auction aimed at converting indivisible property (the real estate) into divisible money. However, this route is almost always the worst option. Properties often achieve only 70-85% of their actual market value at a partition auction. In addition, there are significant costs for the court, the expert, and any lawyers, which further reduce the proceeds and must be borne proportionately by all heirs. The auction is a public, uncontrollable process that minimises the financial return for all parties involved and often permanently damages family relationships. It should therefore be avoided at all costs by agreeing on a fair, expert-based approach to how to fairly divide inherited property. A structured sale is always the better alternative.
Selling an inherited property to a co-heir need not be a minefield. A structured process, starting with an objective valuation and culminating in a notarised contract, is the safest path to achieving a fair outcome for all parties involved. By closely adhering to tax regulations and maintaining transparent communication, the biggest pitfalls—loss of value and disputes—can be effectively avoided. A data-driven approach transforms an emotionally charged situation into a clear financial transaction that secures the inheritance rather than jeopardising it.
Statistisches Bundesamt offers detailed information on construction prices and the real estate price index in Germany.
Deutsche Bundesbank provides the indicator system for the residential real estate market, which includes important data and analyses on real estate development.
Bundesfinanzministerium provides comprehensive information on the regulations and aspects of inheritance and gift tax in Germany.
How long does it take to sell an inherited property to a co-heir?
The process can take between 3 and 9 months. The duration depends on the speed of reaching an agreement, the preparation of the appraisal, any potential financing approval from the bank, and arranging an appointment with the notary.
Is an appraisal mandatory for selling to a co-heir?
It is not legally required but is highly recommended. Without a neutral appraisal, reaching a fair agreement on the price is hardly possible. At the latest, the buyer's financing bank will demand a professional valuation.
Who bears the costs when selling to a co-heir?
The costs for the appraisal are usually shared by the community of heirs. The notary fees and the costs for the land registry transfer are typically borne by the purchasing co-heir alone.
What if the house is still burdened with debts?
The debts are part of the inheritance and are taken over by the community of heirs. When selling to a co-heir, the remaining debts are deducted from the market value to calculate the payout amount. The buyer usually assumes the loan.
Can the sale to a co-heir be reversed?
No, after the notarial certification of the settlement agreement and the land registry transfer, the sale is binding and cannot simply be reversed.
What is the difference between selling the inheritance share and selling the property?
When selling the inheritance share, an heir sells their entire legal position in the community of heirs. When selling the property to a co-heir, the community of heirs as a whole transfers only this one asset to a member and often dissolves afterwards.
