Have you inherited a flat and are wondering what taxes will apply when selling it? The tax obligations can be complex, but with the right knowledge, costly mistakes can be avoided. This article shows you how to reduce your tax burden by up to 30% and safely navigate potential pitfalls.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
When selling an inherited apartment, inheritance tax and speculation tax may be applicable.
The 10-year speculation period begins with the purchase by the testator, not with the inheritance.
High personal allowances for inheritance tax (e.g., €400,000 for children) significantly reduce the tax burden.
Selling an inherited apartment often raises a central question: What taxes apply and how can they be optimised? Many heirs are uncertain about if and when the tax authorities will take a share of the sale proceeds. The two key factors are the inheritance tax on the estate and the capital gains tax on the profit from the sale. Lack of knowledge about deadlines and allowances can quickly diminish the financial blessing of an inheritance. This guide provides you with a clear, data-driven orientation to confidently navigate all tax hurdles and fully secure the value of your inheritance.
Key Points at a Glance
When selling an inherited apartment, inheritance and capital gains tax may apply.
The 10-year speculation period starts with the purchase by the deceased, not at the point of inheritance.
High personal allowances for inheritance tax (e.g., €400,000 for children) significantly reduce the tax burden.
The sale is exempt from capital gains tax if the deceased owned the property for over 10 years or used it themselves in the year of sale and the two preceding years.
Selling more than three properties within five years can be classified as a commercial trade, leading to business tax.
Inheritance Tax: The First Tax Hurdle After the Inheritance
Immediately after the estate is assumed, the tax office assesses whether inheritance tax is due. The amount of this tax depends on two key factors: the market value of the property and your degree of kinship with the deceased. Fortunately, lawmakers have provided for substantial personal allowances that often prevent taxation. For spouses and registered civil partners, an allowance of 500,000 euros applies, while for children it is 400,000 euros per parent. Only the value exceeding this threshold is actually taxed. Even with a property valued at 600,000 euros, a child would only need to pay tax on 200,000 euros. Therefore, an accurate valuation is crucial. With our inheritance tax calculator, you can quickly calculate your anticipated liability. However, this initial tax has nothing to do with the duties that arise from a later sale.
Capital Gains Tax: The Decisive Factor for the Timing of the Sale
If you’re planning to sell an inherited apartment, the speculation tax becomes a focal point. This tax applies to the profit made on the sale if less than ten years have passed between the original purchase and the current sale. The crucial factor here is not the time of inheritance, but the purchase date by the deceased. You inherit their timeline. So, if the deceased acquired the apartment eleven years ago, selling it today would be completely tax-free. This transfer of the holding period is an advantage in over 90% of inheritance cases. However, there is one important exception that allows a tax-free sale even within the ten-year period: personal use. If the apartment was used exclusively for personal living purposes in the year of the sale and the two previous calendar years, the tax is waived. This applies both to use by the deceased and by you as the heir. Find out more about the sale of a property within 10 years. Calculating the taxable gain is the next logical step.
Calculating Profit: How to Determine the Tax Assessment Basis
If speculation tax is indeed due because the deadlines are not met, you must determine the taxable profit. The formula for this is simple: sale proceeds minus the original purchase price and sales ancillary costs. Deductible costs include notary fees, land registry costs, and broker commissions, which often amount to 3.57% to 7.14% of the sale price. Modernization expenses from the first three years after the original purchase can also be considered. An example: An inherited apartment is sold for €350,000. The testator had purchased it for €250,000. The sale costs amount to €15,000. The taxable profit thus amounts to €85,000 (350,000 - 250,000 - 15,000). This profit is taxed at your personal income tax rate, which can be up to 45%. Therefore, accurate documentation of all costs is worth real money. Use our calculator for sale proceeds to create a detailed calculation. However, caution is advised if you have inherited several properties.
The Three-Object Limit: When Selling Becomes a Business
An often overlooked risk is the so-called three-object limit. If you, as a private individual, sell more than three properties within five years, the tax office classifies you as a commercial property dealer. The consequence: Not only is income tax due on the profit, but also trade tax. The good news for heirs: In principle, properties acquired through inheritance are not counted in this calculation. However, this only applies as long as you do not undertake significant value-enhancing measures before the sale. The following activities could be considered commercial:
Extensive modernisations that create a new condition
Subdivision of a plot into multiple parcels
Development of building land
Active promotion and marketing like a property developer
The boundary between private asset management and commercial trading can be fluid. A thorough review of your checklist for property sales is essential here. To correctly assess all these tax aspects, one factor is non-negotiable: the precise value of the property.
Market value as a key figure: Why an accurate assessment is crucial
The market value is the central figure that influences almost all tax calculations. It serves as the basis for determining inheritance tax and is also the starting point for calculating a potential speculative gain. An inaccurate estimate can quickly lead to a tax burden that is 10-15% too high. The tax office usually accepts the value determined in the certificate of inheritance or by an expert. A professional, data-driven valuation protects you from excessive claims and provides legal certainty. Are you wondering what your inherited house is really worth? An AI-driven analysis from Auctoa provides you with an objective market value in just a few minutes and reveals data-driven sales opportunities. Start now for free with our ImmoGPT Chat to get an initial assessment. This ensures that you fulfill your tax obligations on a solid basis.
Conclusion: Strategic planning is the key to a tax-optimized sale
Selling an inherited apartment doesn't have to be a tax trap. By understanding the rules regarding inheritance tax and speculation tax, and by paying attention to the crucial deadlines, you can effectively minimise your financial burden. The key factors are leveraging the generous personal allowances and carefully examining the ten-year period. A professional property valuation forms the foundation for all subsequent steps and provides you with the necessary assurance for the tax office. Don't act hastily; plan the sale strategically. This way, you not only ensure the maximum proceeds but also turn your inheritance into a genuine financial gain.
geerbte-wohnung-verkaufen-welche-steuern-fallen-an
Additional useful links
Das Bundesfinanzministerium offers comprehensive information on inheritance and gift tax.
Das Bundesfinanzministerium provides an article on the application of regulations for the valuation of real estate within the framework of inheritance and gift tax.
Gesetze im Internet offers access to the full Inheritance Tax and Gift Tax Act (ErbStG).
Gesetze im Internet enables access to the complete Valuation Act (BewG).
Das Statistische Bundesamt provides information on construction prices and the property price index.
Das Statistische Bundesamt provides tables on house prices and land prices.
Die Sparkasse offers information on speculation tax when selling a property.
KSK-Immobilien provides a guide on tax-free sale of an inherited property.
FAQ
What taxes will I specifically incur if I sell an inherited apartment?
There may be two main types of taxes: First, the inheritance tax on the value of the property, minus your personal allowances. Second, the capital gains tax on the sale profit if the property is sold within ten years of purchase by the deceased and there was no personal use.
What is the difference between inheritance tax and capital gains tax?
Inheritance tax taxes the transfer of assets from the deceased to you as the heir. Capital gains tax is an income tax and taxes the profit you make when you quickly sell the inherited property again.
How can I legally avoid the speculation tax?
You avoid the tax if you wait for the 10-year holding period of the decedent. Alternatively, you can move into the apartment yourself and take advantage of the owner-occupancy rule: If you use the apartment in the year of the sale and in the two preceding years yourself, the sale is also tax-free.
Does an inherited property count towards the three-property rule?
Normally not. A property acquired solely through inheritance and then sold is not counted towards the three-property limit. However, caution is advised if you carry out extensive modernisations before the sale that significantly increase the value. In that case, the tax office might consider it a commercial activity.
What expenses can I deduct from the sales profit?
If speculative tax arises, you can reduce the taxable gain. Deductible are the original purchase price paid by the deceased, as well as all incidental selling costs such as notary fees, land registry fees, and brokerage commission.
Why is a professional property valuation so important?
An accurate valuation is the basis for calculating inheritance tax and any potential speculation gain. A well-founded report from Auctoa protects you from excessive tax assessments by the tax office and provides you with a reliable basis for your sales decision.
