Property valuation in the event of inheritance: Determine the value accurately without an estate agent and optimise taxes
Are you faced with the task of valuing an inherited property and fear high costs or an incorrect assessment by the tax office? An accurate property valuation in the case of inheritance without an estate agent is not only possible, but also ensures financial benefits. This guide shows you in 5 steps how to determine the market value based on data and avoid typical mistakes.
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The topic briefly and concisely
A property valuation in the event of inheritance is legally required for the determination of inheritance tax and must be reported to the tax office within three months.
The valuation without an agent can be carried out independently using standard methods (comparison value, asset value, income value) in order to save costs.
A lower, but realistic market value can directly reduce the tax burden; tax-free allowances range from €20,000 to €500,000, depending on the degree of kinship.
Valuing an inherited property is an emotional and financial challenge for most heirs. Within just three months after the inheritance, the tax office requires a valuation to determine the inheritance tax. An inaccurate estimate can cost you thousands of euros, whether through an excessive tax burden or conflicts within the group of heirs. However, hiring an expensive estate agent or appraiser is not always the first necessary step. With the right methodology and the appropriate tools, you can conduct a well-founded property valuation for inheritance without an estate agent, optimize your tax burden, and create a fair basis for all further decisions. This article guides you through the entire process.
The legal necessity of an accurate assessment
Immediately after the occurrence of an inheritance, a period of three months begins during which you must report the acquisition to the competent tax office. The basis for calculating inheritance tax is the market value of the property, also known as the fair value, as defined in the Valuation Act (BewG). The tax office often uses flat-rate procedures for estimation that frequently do not take individual, value-reducing factors such as a renovation backlog of 25% into account. An overestimated value directly leads to a higher tax demand. An independent, well-founded valuation for the tax office protects your assets. This is the basis for all further steps.
Understanding Three Recognised Methods of Valuation
The German Valuation Act (BewG) provides three standardised methods to determine the market value of a property. Their applicability depends on the type of inherited property. Understanding these methods is crucial to comprehend the tax office's valuation or to create your own reliable assessment. Choosing the wrong method can lead to deviations of over 20%. Here is an overview of the three methods:
Comparative Value Method: This is the most common method for owner-occupied single-family and two-family houses as well as condominiums. It compares the inherited property with recently sold, similar properties in the neighbourhood. At least 10 comparable properties are ideal for high accuracy.
Asset Value Method: This method is used for owner-occupied properties with few comparable objects. It calculates the notional costs of a new build, from which an age-related depreciation, e.g. 1.5% per year, is deducted. The standard land value is added separately.
Income Capitalisation Method: For rented residential or commercial properties, this method is crucial. It is based on the future expected rental income, from which operating expenses of 18-25% are deducted.
Knowing these methods helps you understand the true value of your property, as we will see in the next section. Learn more about what your inherited house is worth.
Guide: Property Valuation for Inheritance Without an Agent in 5 Steps
A solid valuation without external experts requires a systematic approach. With this 5-step guide, you'll determine a realistic market value that can withstand an initial evaluation by the tax office. This process reduces the risk of misjudgment by up to 30%. Here's how to proceed:
Gather documents: Obtain all relevant documents. These include the land register extract (not older than 3 months), building plans, the energy performance certificate, and a current calculation of living space.
Determine land value: Research the official land value for your property. This is available free of charge via the nationwide BORIS portals of the federal states. The land value is a central factor in any valuation process.
Analyse market data: Investigate current selling prices of similar properties in your region on real estate portals. Pay attention to comparable location, size, and year of construction. Document at least 5 to 10 comparable offers.
Assess condition objectively: Record all value-reducing defects such as leaky windows, an outdated heating system (older than 15 years), or dampness in the basement. Each defect should be quantified with estimated repair costs.
Use digital valuation tools: Utilise AI-supported tools for an initial, data-driven assessment. The Auctoa Estate Manager or our ImmoGPT chat can assist you in compiling the data collected into a valid estimate.
With these steps, you have created a solid foundation. However, even with careful work, there are pitfalls that can distort the results.
Avoid common mistakes in assessment and save costs
When evaluating independently, there are several pitfalls that can lead to an inaccurate and often too high estimation. Emotional attachment to the family home can skew the estimated value by up to 15%. Another common mistake is overlooking hidden defects. Costs for an energy-efficient renovation can quickly account for 20% of the property's value. A detailed checklist for property sales helps ensure nothing is overlooked. Within an inheritance community, differing value perceptions often lead to conflicts. An objective, data-based evaluation is key to reaching an agreement and avoids lengthy disputes that can reduce the value of the inheritance by over 10%. Careful documentation of all value-reducing factors is therefore essential to ensure a realistic valuation and avoid costly mistakes.
Limits of Self-Assessment: When an Expert Opinion Becomes Essential
Although an appraisal without an estate agent is sufficient in many cases, there are situations where an official market value appraisal is indispensable. This is particularly the case if the tax office questions your submitted valuation or if there is a legal dispute within the inheritance community. An appraisal prepared by a publicly appointed and sworn expert is legally binding. The costs for such a full appraisal start at around €2,500 and can amount to up to 1.5% of the property's value. This investment is often necessary to counteract an overestimation by the tax office of 20-30%. Such an appraisal provides an incontestable basis and ensures legal certainty. Learn about the role of appraisals in inheritance cases to make the right decision. Carefully consider when the costs for an expert outweigh the potential benefits.
Conclusion: Financial control through proactive assessment
Conducting property valuation for inheritance without a real estate agent is an effective strategy to reduce costs and maintain control over your inheritance. A thorough analysis based on the three standard methods, combined with digital tools, provides a solid foundation for negotiations with the tax office and co-heirs. Not only do you save up to 3% in agent fees, but you also avoid excessive inheritance tax. Take proactive steps to realistically determine the value of your property. A well-founded valuation is the first step towards making a wise asset decision.
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Additional useful links
The Federal Ministry of Finance offers comprehensive information on inheritance and gift tax.
An article on the consistent application of the regulations for the valuation of real estate within the framework of inheritance and gift tax can also be found at the Federal Ministry of Finance.
The Mecklenburg-Vorpommern Tax Portal provides a detailed guide to the inheritance tax return as a PDF document.
The Federal Statistical Office (Destatis) provides information on construction prices and the property price index.
Current tables on house and land prices are also available from the Federal Statistical Office (Destatis).
Wikipedia offers a comprehensive overview of inheritance tax in Germany.
Wikipedia provides a detailed explanation of the inheritance and gift tax law.
Wikipedia defines and explains the market value of real estate.
FAQ
Do I need to hire a surveyor for property valuation in the case of inheritance?
No, not necessarily. For the report to the tax office, you can initially determine the value yourself. A certified appraiser is only required if the tax office does not accept your valuation or if there are legal disputes with co-heirs.
What documents are absolutely necessary for property valuation in the event of inheritance?
The most important documents are a current land registry excerpt, the energy certificate, building plans (floor plans, sectional drawings), the calculation of living space and, if possible, evidence of modernizations from the last 15 years.
How does a usufruct affect the value of a property in the event of inheritance?
A right of usufruct or residence entered in the land register significantly reduces the market value of the property, as it restricts its use by the new owner. The discount in value is capitalised and deducted from the market value, which can significantly reduce inheritance tax.
What happens if the co-heirs cannot agree on a value?
If co-heirs cannot reach an agreement, engaging a neutral, certified property appraiser is the best approach. Their valuation determines an objective market value, which serves as a fair basis for the buyout of co-heirs or a joint sale, avoiding disputes.
Can I deduct the costs for an appraisal from my taxes?
Yes, the costs of a market value appraisal necessary for determining inheritance tax can be claimed as liabilities in the inheritance tax declaration. This reduces the taxable base.
What deadline does the tax office use for the assessment?
For the determination of the market value and thus for the assessment of the inheritance tax, the date of death of the deceased is always the decisive cut-off date. Changes in the value of the property after this date are irrelevant to the tax calculation.
