An inherited house may seem like a pure asset, but vacancy carries significant financial risks. The ongoing costs can amount to up to 2% of the property's value annually if no measures are taken.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
The annual costs for a vacant house amount to approximately 1-2% of its market value, due to property tax, insurance, and maintenance.
Reporting a vacancy to the home insurance provider is mandatory to avoid losing coverage; this is typically applicable after 60-90 days.
Under certain conditions, such as unintentional vacancies, a reduction of up to 50% in property tax can be applied for.
Are you facing the question of what should happen with an inherited property? An extended period of vacancy often seems like the simplest solution but quickly becomes a financial trap. Many heirs underestimate the sum of taxes, insurance, and unavoidable operating costs that can amount to several hundred euros every month. This article precisely breaks down the costs incurred during the vacancy of an inherited house, how you can actively manage these, and why a quick, data-driven decision is crucial for maintaining the value of your property.
Key Points: Your Checklist for Vacancy Costs
If you inherit a house and leave it unused, expenses can quickly add up. These are the points you should check immediately to minimise the financial burden.
Ongoing Costs: Expect annual costs of 1% to 2% of the property's market value for property tax, insurance, and maintenance, even if the house is unoccupied.
Insurance Obligation: Notify your home insurance company immediately about the vacancy. Most policies define a property as vacant after 60 to 90 days, which is considered an increased risk and triggers a reporting obligation.
Property Tax Discount: In cases of involuntary vacancy, you can apply for a waiver of up to 50% of property tax if rental income has completely ceased.
Depreciation: An unheated house can suffer building damage worth several thousand euros per winter, potentially reducing market value by over 5%.
Creating a Basis for Decision-Making: A professional valuation of the inherited property is the first step to relate costs to value and make an informed decision.
This overview shows that passivity is expensive. The following sections provide you with detailed facts to take the right strategic steps.
The fixed cost blocks: These payments continue even during vacancies
Do you think an empty house incurs no costs? A misconception that can cost thousands of euros annually. Certain expenses are legally or contractually mandatory, regardless of property usage. Property taxes and insurance alone can total over €1,000 per year.
These items continuously affect your budget:
Property tax: This municipal levy is due annually and often amounts to €300 to €800, depending on the community's assessment rate.
Home insurance: Protection against fire, water, and storm damage is essential and costs between €250 and €600 annually.
Operating costs: Even without consumption, basic charges for water, sewage, and waste disposal can add up to €20 to €50 per month.
Chimney sweep: Regular sweeping and inspection duties apply even to unused chimneys and cost approximately €50 to €100 per year.
Insurance premiums, in particular, can increase by 25% or more when a property is vacant, as insurers assess a higher risk for undetected damages. These fixed expenses are the first reason why a quick decision on the future of the property can save you significant money. However, aside from these direct costs, there is an even bigger, often invisible danger.
Risk of Vacancy Notification: Why You Must Immediately Inform Your Insurer
Failing to report a vacancy is one of the costliest mistakes heirs can make. Insurers consider an unoccupied house as an 'increased risk' according to § 23 VVG. If a damage case is only discovered after months, it is often significantly larger. If you do not report the vacancy, the insurance can reduce the benefit by up to 100% in the event of a claim or terminate the contract.
Most insurers set a period of two to three months after which a house is considered vacant. After your notification, the insurer will usually impose a premium surcharge, but full coverage will remain. Additionally, you will be given duties, known as obligations.
These typically include:
Regular inspections of the building, at least once a week.
Shutting off all water lines to prevent frost damage.
Maintaining a frost-proof temperature during the winter months.
Ensuring all windows and doors are securely closed.
Compliance with these obligations is crucial to avoid bearing the cost of tens of thousands of euros in the event of a claim. Having inherited a property in need of renovation further increases these risks. These stringent requirements demonstrate how important active management is, even if the initial goal is merely to secure the property.
Save on taxes with vacancies: How to get 25% of your property tax back
One of the few ways to actively reduce ongoing costs is through the Property Tax Act (GrStG). Under certain conditions, you can apply for a partial remission of property tax. If the actual rental income is more than 50% below the usual annual cold rent, a reduction of 25% of the property tax is possible. If the rent is completely absent, even 50% can be waived.
The crucial condition is that you have not caused the vacancy yourself (§ 34 GrStG). The tax office requires proof of serious and continuous rental efforts at a market-appropriate price. An excessively high rental demand can be considered self-inflicted and nullify the claim.
To document your efforts, you should be able to provide the following:
Advertisements on online portals such as ImmoScout24 or classifieds.
Commissioning a real estate agent.
Adjustment of rent to market level.
The application must be submitted to the relevant municipality by 31 March of the following year. For the tax year 2024, the deadline would therefore be 31 March 2025. This regulation is a small financial buffer, but it does not solve the core problem of depreciation.
The Silent Depreciation: How Vacancies Push Down the Sale Price
Each month of vacancy affects the building's fabric and directly impacts the value of your property. Without regular heating and ventilation, the risk of damp and mould increases, which can cost 5,000 euros or more to rectify. In winter, undrained water pipes can burst, causing damage that often goes unnoticed until spring and reduces the value by 10-15%.
Additionally, the risk of vandalism and burglary increases. An overgrown garden and an overflowing mailbox signal that no one is on-site. Removing graffiti or repairing broken windows incurs additional costs of several hundred euros per incident. These visible defects deter potential buyers and lead to price reductions of up to 20%. Are you wondering how to determine the current market value despite these factors? Our inheritance tax calculator can provide an initial guide.
A precise, data-driven appraisal from Auctoa protects you from unrealistic price expectations. It provides an objective foundation to plan your next steps effectively. After all, the best strategy against devaluation is a clear decision.
Conclusion: Act proactively instead of waiting at a high cost
Leaving an inherited house vacant is not a cost-neutral interim solution, but rather an active financial decision with significant consequences. The ongoing costs amounting to 1-2% of the property's value per year, the risk of depreciation, and the strict insurance obligations make passivity an expensive undertaking. Therefore, the decision whether to sell or rent the house should be made quickly and based on solid data.
Gain clarity with a neutral valuation. The ImmoGPT chat by Auctoa can answer your initial questions about your options around the clock. Make an informed decision to secure the inheritance, rather than letting it be consumed by ongoing costs.
geerbtes-haus-leer-stehen-lassen-welche-kosten
Additional useful links
Statista offers a thematic page on real estate vacancy with statistics and data.
The Tagesschau reports on housing vacancy based on the microcensus.
The BBSR (Federal Institute for Research on Building, Urban Affairs, and Spatial Development) provides a technical article on the topic of housing vacancy.
The DIA (German Institute for Retirement Provisions) sheds light on the issue of vacancy and decay through inheritance.
Wüstenrot offers a guide on inheritance tax related to real estate.
Wikipedia provides an article on inheritance tax in Germany.
The Handelsblatt highlights ideas from municipalities to combat housing vacancy.
FAQ
What insurance is necessary for an unoccupied inherited house?
A residential building insurance is essential to protect the property against risks such as fire, storm, and water damage. Additionally, a homeowners’ and landowners’ liability insurance is highly recommended to safeguard against third-party claims, for instance, from falling roof tiles.
Do I need to heat an empty house in winter?
Yes, most insurance policies require the house to be heated in order to prevent frost damage to water-carrying pipes. Alternatively, all pipes must be professionally drained to maintain insurance coverage.
What happens if I don't report the vacancy to the insurance?
If you do not report the vacancy, you are committing a breach of obligation. In case of damage, the insurer may refuse to provide coverage or significantly reduce the benefits. Additionally, the insurer may terminate the contract without notice.
How do I demonstrate my rental efforts to the tax office for the property tax exemption?
Collect all evidence of your efforts. This includes screenshots of online ads, correspondence with agents, proof of viewings, and a record of why a rental didn’t materialize. A market-appropriate rent is crucial.
Are there any costs incurred if electricity and water are completely shut off?
Even when electricity and water are turned off, costs continue to accrue. These include property tax, insurance premiums, chimney sweeping fees, and expenses for the maintenance and security of the property.
What is the first step if I have inherited a house and it is vacant?
The first and most important step is determining the market value of the property. A professional evaluation provides you with a solid basis to weigh the costs and risks against the potential proceeds from sale or rental and to make a strategic decision.
