Financial Calculator
Inheritance Tax Calculator
Estimate the value of inherited land for the tax office
Have you inherited a property and now need to submit an inheritance tax return? The tax office often determines the value based on rigid formulas that ignore the actual condition of your property. This can result in an unjustifiably high tax demand of several thousand euros.
With access to Google, BORIS, and Deep Research.
The tax office often values inherited properties above market value because it uses standardised procedures without conducting inspections.
According to § 198 BewG, heirs have the right to demonstrate a lower property value through a qualified appraisal, thereby saving on inheritance tax.
A market value report must be prepared by a certified expert (e.g. according to ISO 17024) to be recognised by the tax office.
The valuation of an inherited property is a critical moment that determines the amount of your inheritance tax. The tax office uses standardized procedures which often overestimate the actual market value by 20% or more because individual features such as renovation needs or a poor location are not taken into account. This article explains the valuation procedures of the tax office, presents your right to provide evidence of a lower value, and how you can significantly reduce your tax burden through a qualified appraisal. In this way, you ensure that you only pay the amount of tax that corresponds to the true value of your inheritance.
When faced with an inheritance case, the tax office determines the value of your property to set the inheritance tax. This is done based on the Valuation Act (BewG) in an automated process, usually without a site visit. A central basis often used is the standard land value, an average value that ignores individual property features such as building damage or an unfavourable layout. This blanket calculation often leads to a valuation that is up to 30% above the actual market value. The result is a potentially inflated tax demand, unnecessarily burdening your financial situation. It is therefore crucial to understand the tax office's methodology to pave the way for a fair assessment.
The Comparative Method for Standard Properties
For condominiums and single-family homes in common locations, the tax office primarily uses the comparative method. Here, the selling prices of at least five similar properties from the recent past are used as a reference. However, if there are not enough comparable sales, which is often the case in rural or very specific locations, the estimate becomes inaccurate. A lack of a direct comparison can distort the valuation by over 15%.
The Income Approach for Investment Properties
For rented properties, the income approach is applied, consisting of the land value and the building's income value. The calculation is based on the sustainably achievable rental income, minus the management costs, which are generally estimated at 19 to 25%. A high vacancy rate or below-average rents are often not adequately accounted for in this estimate. A detailed property valuation report can set more realistic values here.
The Cost Approach as a Last Resort
If the other two methods do not apply, the cost approach is used. It sums up the construction costs of the building minus age-related depreciation and the land value. Since a change in the law in 2023, this method often leads to valuations that are 20-30% higher than before. This method is the least market-oriented and therefore offers the greatest potential for challenge. Understanding these methods is the foundation to asserting your right to a fair valuation.
The law explicitly grants you the right to challenge the tax office's assessment. According to Section 198 of the Valuation Act (BewG), you can prove a lower market value and thereby reduce your tax burden. To do this, you must act within the one-month appeal period after receiving the tax notice. The key to success is a qualified market value appraisal prepared by a certified expert. The cost of this appraisal, which is approximately 0.5% to 1.5% of the property's value, can be deducted as a liability from the estate for tax purposes. Such an appraisal in the event of inheritance is an investment that often pays off multiple times. To be recognised by the tax office, the appraisal must meet strict formal criteria. The following list shows the most important requirements:
Qualification of the appraiser: The expert must be publicly appointed and sworn in or hold a certification according to DIN EN ISO/IEC 17024.
Principle of the relevant date: The valuation must be carried out exactly on the date of death of the deceased.
Completeness: All factors influencing value, such as building defects, repair backlog, legal encumbrances (e.g., right of way) or limited monument protection, must be documented.
Traceability: The methodology and the data used must be fully and coherently presented to the tax office.
Therefore, appointing the right expert is the next logical step.
In the process of determining the value of an inherited property, several pitfalls can cost you thousands of euros. A proactive approach is crucial to avoid them. The most common mistake is passively accepting the initial notice from the tax office without critically examining the value. Often, the one-month appeal period is missed, making the excessive value legally binding. Another mistake is hiring an unqualified appraiser whose expertise does not meet the tax office's requirements. To ensure that you determine the correct value of your inherited house, you should consider the following points:
Keep an eye on deadlines: Note the one-month appeal period immediately upon receipt of the notice.
Collect documents: Gather all relevant documents, such as land registry excerpts, construction plans, and evidence of renovations or defects, at an early stage.
Document devaluation factors: Have aspects like asbestos contamination, outdated heating systems, or legal restrictions assessed by an expert.
Choose a qualified appraiser: Check the certification of the expert (e.g., according to ISO 17024) before commissioning a project.
Careful preparation and choosing the right partner protect you from financial disadvantages and accelerate the entire process.
Previously, creating a market value appraisal was a process that took weeks. Today, digital solutions can significantly speed up the path to a fair valuation. AI-powered analysis tools allow for an initial well-founded assessment of the property's value within just 48 hours. These data-driven evaluations analyse thousands of comparable properties, taking into account real-time market data. With our inheritance tax calculator, you can get an initial indication of your potential tax liability. For legally compliant proof to the tax office, Auctoa offers a digital valuation that meets all the requirements of § 198 BewG. You will receive an appraisal that is reviewed by certified partners and serves as the basis for your tax return. Use our free ImmoGPT chat to clarify initial questions and start the process. These digital helpers not only save time but also provide the precise data foundation for your further actions.
The valuation of an inherited property by the tax office is not an irrevocable judgment. It is an initial, often inaccurate estimate that you, as an heir, should not accept without question. The legislator provides you with the right to prove a lower fair market value as an effective tool to reduce your inheritance tax by up to 30%. The key lies in understanding the tax office's standardised methods and proactively countering them with a qualified market value appraisal. Investing in a professional appraisal is one of the safest ways to protect the true value of your inheritance. The value of your inheritance should be determined by facts, not by the broad assumptions of the tax authorities.
Das Bundesfinanzministerium offers comprehensive information on inheritance and gift tax.
An article from the Bundesfinanzministerium explains the application of the regulations for the valuation of real estate in the context of inheritance and gift tax.
The Tax Office of North Rhine-Westphalia provides forms for inheritance and gift tax.
The Federal Statistical Office provides information on construction prices and real estate price indices.
Tables from the Federal Statistical Office offer detailed data on house and land prices.
BORIS-D is the central information system of the expert committees for property values in Germany.
Das Bundesfinanzministerium answers frequently asked questions about the new property tax.
The expert committees publish the Real Estate Market Report Germany 2023.
Do I have to accept the value assessed by the tax office for my inherited property?
No. You have the legally established right (§ 198 BewG) to prove a lower actual market value. This is done by presenting a qualified market value appraisal.
What are the benefits of an appraisal from Auctoa?
Auctoa combines AI technology with the expertise of certified appraisers. You receive a quick, data-driven and legally sound valuation that meets all the formal requirements of the tax office, helping you save time and taxes.
What happens if I miss the objection deadline?
If you miss the one-month objection period, the value set by the tax office becomes legally binding. A correction at a later date is then only possible in very rare exceptional cases. Therefore, it is crucial to act quickly.
Are the costs of the appraisal reimbursed?
The costs are not reimbursed directly, but they are fully deductible as liabilities of the estate from inheritance tax. So, they directly reduce the taxable base and thus the tax burden.
Is a short appraisal sufficient for the tax office?
No, usually not. The tax office requires a comprehensive market value appraisal that is conclusive, comprehensible, and prepared by a certified expert. Short appraisals generally do not meet these strict requirements.
Can I also use a sale price as proof?
Yes, a sale price achieved in the ordinary course of business, usually within a year of the date of inheritance, can serve as strong evidence of the lower common value and be accepted by the tax office.
