Are you tasked with having an inherited property valued for the notary? This process is crucial for the certificate of inheritance, the land register entry, and the amount of inheritance tax. An inaccurate valuation could cost you thousands of euros.
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The topic briefly and concisely
The market value according to § 194 BauGB is the binding basis for notaries, land registry offices, and tax offices.
A professional appraisal can significantly reduce the inheritance tax burden, as the tax office's valuation is often 15-20% too high.
The costs for a recognized valuation report (starting at approximately €2,000) can be deducted for tax purposes as liabilities of the estate.
Determining the value of a house after an inheritance is more than just a formality; it is a crucial financial decision. For the notary, land registry office, and tax office, you need an exact market value, as defined by § 194 of the Building Code (BauGB). Often, the tax office determines a blanket, excessively high value, which can lead to an unnecessarily high tax burden of up to 30%. This article shows you how to determine the value correctly, what documents the notary needs, and how a professional appraisal can reduce your financial burden by many times the cost of the appraisal. This way, you safely navigate through the process and make data-driven decisions.
Summary: Checklist for Valuation
When you inherit a property, accurate valuation is essential for the notary and the tax office. The process not only ensures legal compliance but also directly influences the amount of inheritance tax. A professional appraisal protects you from excessive demands.
The market value is crucial: According to § 194 BauGB, the market value (fair value) is the basis for all official procedures.
Challenge the tax office’s valuation: The tax office’s lump sum valuation is often 15-20% above the actual market value. You have the right to a counter-appraisal.
The notary requires value for the certificate of inheritance: Proof of the property’s value is necessary for applying for a certificate of inheritance or updating the land register.
Three recognised methods: Depending on the type of property, the comparative value, income value, or cost value method is applied, as specified in the ImmoWertV 2021.
Costs are tax-deductible: The costs for a market value appraisal, often starting from 2,000 euros, can be deducted from inheritance tax as liabilities of the estate.
These steps form the foundation for a transparent and financially optimised inheritance process.
Why an accurate house value is indispensable for the notary
Faced with an inheritance case, many wonder: Why does the notary need an exact property value? The answer lies in several legal requirements. The value serves as the basis for calculating the fees of the probate court and the notary. Without a plausible value, an inheritance certificate for the property cannot be issued to designate you as the rightful heir.
This inheritance certificate is essential to initiate the change of ownership in the land registry. The land registry office requires clear proof of succession, and the property value is part of this process. An unclear or missing valuation leads to delays of several weeks. Ultimately, a precise value ensures legal certainty for all parties involved and forms the basis for future tax assessment. Correct determination from the outset thus prevents not only bureaucracy but also financial disadvantages.
You must present these documents to the notary
For a smooth transaction at the notary, complete documentation is essential. Good preparation can expedite the process by up to 4 weeks. An up-to-date land register extract is the most important document, as it provides evidence of ownership and any encumbrances such as mortgages or rights of way. Ensure you have the following documents readily available:
Land register extract: Not older than 3 months.
Certificate of inheritance or notarial will: As proof of your status as an heir.
Site plan and cadastral map: For precise identification of the property.
Construction plans and living space calculation: Detailed information about the property.
Energy performance certificate: Legally required and relevant for the assessment.
Proof of modernisations: Invoices from the last 10-15 years can enhance the value.
For condominiums: Declaration of division and the minutes of the last 3 general meetings of owners.
If you are missing documents, a property appraiser or our experts at Auctoa can assist you in obtaining them. With complete papers, you set the foundation for the recognised valuation procedures.
Recognized methods for property valuation according to ImmoWertV
To determine the market value of a property in a legally compliant manner, the legislator prescribes specific methods. These are anchored in the Property Valuation Ordinance (ImmoWertV) and the Valuation Act (BewG). A qualified appraiser selects the appropriate method depending on the type of property in order to determine a realistic market value.
The three central methods are:
Comparison Method (§ 183 BewG): This method is primarily used for owner-occupied single-family houses and condominiums. It is based on the actual purchase prices achieved for at least 5-10 comparable properties in the nearby area.
Income Method (§§ 184-188 BewG): For rented residential or commercial properties, the focus is on income. Here, future rental income, minus operating costs (about 20-25% of net cold rent), is capitalised to determine the value.
Cost Method (§§ 189-191 BewG): If there are no comparable properties or rents, this method is used. It determines the cost of a hypothetical new construction of the building and deducts an age-related reduction in value. The land value is added separately.
The choice of the correct method is crucial for acceptance by the tax office. A certified report justifies the choice of method in detail over 30-50 pages, thus protecting you against incorrect assumptions by the authorities. This methodological accuracy is the main difference from the often disadvantageous estimation by the tax office.
Tax Office vs. Expert: Why the Difference Can Be Up to 30%
After you have reported the case of inheritance, the tax office determines the property value to set the inheritance tax. This often happens in a general manner without an on-site inspection. The result is frequently a value that is 15% or more above the actual market value, as individual characteristics like a roof in need of repair or outdated electrical systems are not taken into account.
However, you do not have to accept this value. The law grants you the right to demonstrate a lower fair market value through a qualified expert appraisal (§ 198 BewG). An independent expert conducts an inspection, analyses the building's condition, and considers value-reducing factors. Such an appraisal can often reduce the tax burden by several thousand euros. For example, if you inherit a house valued at 450,000 euros and your allowance is 400,000 euros, you pay taxes on 50,000 euros. If the tax office assesses the house at 500,000 euros, your tax base doubles to 100,000 euros. An Auctoa inheritance manager can coordinate the necessary steps here. Investing in an appraisal is often the key to significant savings.
Costs and Benefits of a Professional Valuation Report
Commissioning an expert is an investment that almost always pays off. The costs for a legally valid market value appraisal, recognised by tax offices and notaries, start at about €2,000 to €2,500 for a standard single-family house. These costs depend on the complexity and value of the property. For an initial orientation, a brief report starting at approximately €500 may suffice, but this is usually not accepted by authorities.
The key advantage: The costs for the appraisal are fully deductible from inheritance tax as estate liabilities. This directly reduces your tax burden. Suppose an appraisal costs €2,500 and lowers the value set by the tax office by €50,000. With an inheritance tax rate of 15%, you save €7,500 in taxes alone. In this example, the financial net benefit amounts to €5,000. With our Inheritance Tax Calculator, you can quickly calculate your savings potential yourself. This way, an expense becomes a strategic investment in securing your inheritance.
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The determination of a property's value following an inheritance is a critical process that dictates the financial burden of inheritance tax. Do not rely on the tax office's blanket estimates, which are often 15-20% too high. A professional market value appraisal, prepared by a certified expert in accordance with the standards of the ImmoWertV, provides a realistic and legally secure value for the notary and the tax office. The costs for this are not only tax-deductible but often pay for themselves multiple times over through tax savings. Act proactively to document the true value of your property. A precise, data-driven valuation is the safest way to protect your inheritance and avoid financial disadvantages.
Additional useful links
Bundesfinanzministerium offers comprehensive information on inheritance and gift tax.
Statistisches Bundesamt provides up-to-date statistics on construction prices and real estate price indices.
Deutsche Bundesbank presents its indicator system for the housing market.
Gesetze im Internet provides the full text of the Inheritance and Gift Tax Act (ErbStG).
Hessische Verwaltung für Bodenmanagement und Geoinformation provides information on property value determination and market value appraisals.
Stiftung Warentest examines how tax offices determine the market value of properties.
FAQ
Do I always have to commission an expensive appraisal?
No, not always. If the value of the property is well below your personal tax allowance (e.g. €500,000 for spouses, €400,000 for children), an expensive appraisal is often not necessary. However, it is highly recommended if the value is close to or exceeds the allowance, or if a community of heirs desires a fair distribution.
What is the best evaluation method?
There is no 'best' method, only the one suitable for the specific type of property. For condominiums, the comparative value method is ideal. The income approach is used for apartment buildings. For unique properties without comparable data, the asset value method is appropriate. A qualified appraiser chooses the correct method.
What happens if I provide the notary with a value that is too low?
The probate court and the notary initially rely on the value you provide. However, if there are reasonable doubts about its accuracy, the court may undertake its own assessment or request an expert opinion. At the latest, the tax office will thoroughly examine the value as part of the inheritance tax review.
Can I submit Auctoa's evaluation directly to the notary?
Auctoa offers AI-assisted evaluations and analyses that provide you with an excellent, data-driven basis for your decisions. For submission to a court or tax office, we connect you with certified appraisers who create a recognized market valuation report according to legal requirements. Contact us to find the right service for your situation.
How quickly do I need to have the house value assessed after the inheritance?
There is no fixed deadline for the valuation itself, but you must report the inheritance to the tax office within three months. Since the valuation is the basis for the inheritance tax declaration and the application for the certificate of inheritance, you should initiate the process promptly after the inheritance occurs. An appraisal usually takes 3-4 weeks.
What is the difference between market value and standard value?
The market value (or market price) is the realistic price that could currently be achieved in a sale. The standard value is an outdated tax assessment basis that has not been used for inheritance tax since 2009. Today, only the market value according to § 194 BauGB is relevant.
