Have you inherited a rented house and are facing complex decisions? Selling such a property presents financial opportunities, but also significant legal and tax challenges. This guide shows you how to proceed strategically.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
If you sell an inherited rented house, you need to consider the ten-year speculation period assumed from the deceased to avoid high tax payments on the profit.
The principle "purchase does not break rent" protects the tenant; the new owner takes over the existing lease agreement and can only terminate it under strict conditions, such as personal use.
A professional property valuation is crucial as it forms the basis for inheritance tax, the selling price, and negotiations within an heir community.
Selling an inherited house that is also rented out presents heirs with a double challenge. On one hand, the complex regulations of inheritance law must be observed; on the other hand, the tenant's rights remain unaffected by the change of ownership. Many heirs underestimate the tax implications, particularly the speculation tax, which can nullify a profit of tens of thousands of euros. This article provides you with clear guidance to master the seven most important aspects. You will learn how to meet deadlines, optimise taxes, and deal legally with tenants to successfully complete the sale.
Step 1: Establishing Legal Foundations with Certificate of Inheritance and Land Register
Before you consider selling, you must prove your legitimacy as the new owner. The first step is often applying for a certificate of inheritance at the probate court, which identifies you as the rightful heir. Note the deadline of six weeks from the knowledge of the inheritance, within which you could renounce it.
A proper land registry entry is essential for the sale. Only those listed as the owner in the land registry can legally sell the property to a third party. Transferring the land registry to your name is therefore a necessary step that can take several weeks to process. Plan this administrative lead time of at least 4 to 8 weeks firmly into your schedule. Early clarification of these formalities lays the foundation for all further steps, as detailed in our property sale checklist. Without these documents, a tax assessment or sales negotiation is unthinkable.
Step 2: Identify the speculation tax as a cost trap
One of the greatest financial risks when selling an inherited rented house is the speculation tax. It is incurred if less than ten years have passed between the original purchase by the deceased and your sale. It is important here not to take the time of inheritance into account, but rather the date documented in the purchase contract of the deceased.
A brief example illustrates the regulation: If the deceased acquired the property in 2016, you can sell it tax-free from 2026 onwards. A sale in 2025 would subject the entire appreciation in value since 2016 to your personal income tax rate, which can quickly cost 45% of the profit. The speculation period is therefore essentially inherited. The exemption limit of 600 euros per year is practically irrelevant for property gains. A careful examination of the speculation period for inherited houses is therefore indispensable. This examination is crucial in determining the right timing for your sales strategy.
Step 3: Optimise inheritance tax through valuation discounts
Regardless of the speculation tax, inheritance tax is applied to the estate itself if the property's value exceeds your personal allowances. These allowances are tiered according to the degree of relationship and, for example, amount to €500,000 for spouses and €400,000 for children. For unrelated heirs, the allowance is only €20,000.
For rented properties, the legislator grants a significant benefit. When determining the taxable value, the market value of the property is generally reduced by 10%. This valuation discount can reduce your tax burden by several thousand euros. If you cannot pay the inheritance tax from liquid assets, there is an option to defer payment over ten years from rental income. A precise calculation is essential, for which our inheritance tax calculator provides a first guideline. Correct valuation lays the foundation for dealing with the tax office.
Step 4: Understanding tenant rights – “Buy does not break rent”
The principle “sale does not break rent” (§ 566 BGB) is crucial when selling an inherited rented house. The buyer fully assumes the existing rental contract and takes over all rights and obligations. Termination solely due to the sale is excluded. This protects the tenant but can reduce the achievable sale price by 15% to 30% as investors factor in the risk and administrative effort.
Another important point is the tenant's statutory right of first refusal under § 577 BGB. This right exists when a rented apartment is converted into a condominium and sold for the first time. The tenant must be informed about the sale and the conditions, and then has two months to exercise their right of first refusal. However, this right generally does not apply to the sale of a rented house as a whole. Transparent communication with the tenant is crucial for a smooth process.
Step 5: Realistically assess termination options and waiting periods
Many buyers speculate that they will use the property themselves after the purchase. However, as a seller, you must clearly communicate that terminating a lease is subject to significant obstacles. The new owner cannot terminate the tenant without good reason. The most common reason is termination for personal use, which is subject to strict legal requirements.
Additionally, after converting to residential property, statutory protection periods apply to terminations. These are at least three years nationwide. In areas with a tight housing market, federal states can extend this period to up to ten years. During this time, termination for personal use is excluded. The standard notice period for the landlord also extends with the duration of the tenancy and can be up to nine months after eight years of tenancy. Potential buyers need to be aware of these long periods. Knowledge of the property's value is fundamental in this context, as our article What is my inherited house worth explains. This factual situation directly influences negotiations.
Step 6: Use a data-driven property valuation as a strategic foundation
The market value is the most important metric in the entire sales process. It forms the basis for setting the inheritance tax, calculating a potential speculation tax, and of course, for determining a realistic offer price. The tax office uses standardised methods for value determination, such as the comparative value, income value, or asset value methods, which often inadequately reflect the individual condition of the property.
An independent, data-based assessment is therefore essential to avoid acting on an incorrect value. An error of just 5% on a property value of 400,000 euros can already mean a loss of 20,000 euros. Instead of relying on your intuition, an AI-supported analysis provides an objective basis. Test our ImmoGPT chat now without obligation to get an initial, data-driven assessment of your inherited property. This precise analysis is the starting point for the sales decision, especially when co-heirs are involved.
geerbtes-vermietetes-haus-verkaufen-was-beachten
If you inherited the property as part of a community of heirs and not alone, the complexity increases significantly. Selling the house requires a unanimous decision by all co-heirs. A single obstinate co-heir can block the entire process, leading to significant delays and loss of value.
If no agreement is reached, you are often left with only two disadvantageous options:
Selling your inheritance share: You can sell your share to a third party or another co-heir, but generally achieve a price that is 10-15% below the proportional market value.
Partition auction: This is a public forced auction to dissolve the community, often resulting in a sale price that is up to 30% below the open market value.
Clear communication and an objective data basis, like a neutral valuation, are crucial to avoid conflicts. Clarify early on, what to do if a co-heir does not want to sell. A joint approach ensures financial success for all involved.
Conclusion: Strategic planning is the key to success
What documents do I need to sell an inherited rented house?
You will definitely need proof of your inheritance (inheritance certificate or notarised will with opening protocol) and must be registered as the new owner in the land register. Additionally, the energy certificate, the existing tenancy agreement, floor plans, and a current property valuation are essential.
How does the condition of the property affect the sale?
A possible backlog of renovations or need for modernisation reduces the selling price. For rented properties, carrying out extensive work can often be challenging. An appraisal helps to realistically estimate the costs and take them into transparent account in the sale price.
Do I have to inform the tenant about my intention to sell?
Although there is no obligation to inform in advance, transparent communication is advisable to ensure cooperation during viewing appointments. At the latest, if the tenant has a pre-emptive right, you must inform them about the notarised purchase contract and its conditions.
Can I pay the inheritance tax with the proceeds from the sale?
Yes, this is a common approach. However, you must pay the tax to the tax office on time. Plan your sales process so that the proceeds are available in good time. In certain cases, it may be possible to defer the tax.
What is the difference in selling price between a rented and a vacant property?
A rented property often achieves a 15-30% lower selling price than a comparable vacant property. This reduction is due to the limited pool of potential buyers (mostly investors) and the lack of immediate personal use options.
How do I determine the right value for my inherited house?
Do not rely solely on the tax office's estimation. An independent, data-driven valuation by experts such as Auctoa takes into account the rental status, condition, and current market situation precisely. This provides you with a solid basis for price negotiations and tax declarations.
Additional useful links
The Federal Ministry of Finance provides detailed information on inheritance and gift tax.
The legal text of § 194 of the Valuation Act (BewG) concerning market value determination is available at gesetze-im-internet.de.
FAQ
What documents do I need to sell an inherited rented house?
You absolutely need proof of your inheritance (certificate of inheritance or notarised will with opening protocol) and must be registered as the new owner in the land register. Additionally, the energy certificate, existing rental contract, floor plans, and a current property valuation are essential.
How does the condition of the property affect the sale?
A possible backlog of repairs or need for modernization reduces the sale price. With rented properties, it is often difficult to carry out extensive work. An appraisal helps to realistically estimate the costs and transparently account for them in the sale price.
Do I need to inform the tenant about my intention to sell?
Although there is no obligation to provide advance information, transparent communication is advisable to ensure cooperation during viewing appointments. At the latest, if the tenant has a right of first refusal, you must inform them about the notarized purchase agreement and its terms.
Can I pay the inheritance tax with the proceeds from the sale?
Yes, that is a common approach. However, you must pay the tax office on time. Schedule the sales process so that the proceeds are available in a timely manner. In certain cases, a deferment of the tax can be requested.
What is the difference in sale price between a rented and a vacant property?
A rented property often achieves a sale price that is 15-30% lower than that of a comparable vacant property. The discount results from the limited pool of buyers (mostly investors) and the lack of opportunity for immediate personal use.
How do I find the right value for my inherited house?
Do not rely solely on the tax office's estimate. An independent, data-driven evaluation by experts such as Auctoa accurately considers the rental status, condition, and current market situation. This provides you with a solid foundation for price negotiations and tax declarations.
