An inherited property often causes conflicts in 9 out of 10 communities of heirs. The reason is often the unclear distribution of the sales proceeds. This guide shows you how to structure the process into 5 clear steps and achieve a fair solution for all parties involved.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
An independent market value appraisal is the most important foundation to avoid disputes and ensure a fair distribution of the sale proceeds.
The consensual sale of the property generally achieves up to 30% higher proceeds than a court-enforced auction.
Each co-heir can sell their share of the inheritance to third parties at any time, but the other heirs have a pre-emption right for two months.
You have jointly inherited a property and are wondering how the proceeds from the sale can be fairly divided within the community of heirs? This situation holds significant potential for conflict, as differing interests can quickly lead to deadlock without a clear strategy. Nearly 30 percent of all communities of heirs last more than six years, often due to disagreements over a property. This article offers you a practical 5-step plan that helps you objectively determine the property's value, correctly apply the legal inheritance quotas, and fairly distribute the net proceeds after deducting all costs. In this way, you not only secure your share but also maintain family harmony.
Step 1: Understanding legal foundations and inheritance quotas
An inheritance community is a mandatory community in which all co-heirs can only dispose of the estate together (§ 2032 BGB). No heir can act alone. The basis for the distribution of the sale proceeds is the statutory or testamentary inheritance share. Without a will, the statutory succession determines the shares. For example, the spouse typically inherits 50% alongside the children, while the children share the remaining 50%. With two children, each child would receive 25% of the proceeds. Knowing your exact inheritance share is the first, indispensable step towards a fair distribution. A settlement agreement that records the agreements of all heirs provides the necessary legal certainty for this. The complexity of inheritance shares, especially with multiple degrees of kinship, makes an exact determination of the share of inheritance essential before further steps are taken.
Step 2: Determine the objective property value through an appraisal
What is the true value of the inherited property? Emotional attachments or outdated price expectations often lead to disputes. An independent market value appraisal is therefore not an option, but a necessity for a fair basis. Although there is no legal obligation for an appraisal in the case of inheritance, it is strongly recommended to avoid financial disadvantages. The tax office often estimates the value for inheritance tax arbitrarily and tends to overestimate it; an expert appraisal can correct this value by 20 to 50 percent and thus significantly reduce the tax burden. The costs for such an appraisal, which start at about 2,800 Euros, are paid from the estate and protect all heirs from misjudgments. An AI-supported property valuation like that from Auctoa can provide you with an initial data-driven and neutral assessment within 48 hours. This objective evaluation forms the basis for all further decisions, from decision making in the heir community to the final sale.
Step 3: Shape the sales process collaboratively and transparently
The private sale is the best option, as it usually achieves the highest return. This requires a unanimous decision from all co-heirs. Agree on the sales strategy together. This includes agreeing on a minimum sale price based on the market value appraisal. Also clarify who will handle communication with estate agents and interested parties, or whether this task will be delegated to a neutral third party. A clear distribution of tasks prevents misunderstandings. All costs incurred during the sales process will be deducted from the proceeds before distribution. These include:
Estate agent's commission (about 3% to 7% of the purchase price)
Costs for the valuation report (about 0.5% to 1.5% of the property's value)
Notary fees for the purchase contract (about 1.5% of the purchase price)
Possibly costs for the deletion of land charges
Transparent documentation of all expenses is crucial for maintaining trust within the group. With a clear sales strategy, you can efficiently manage the process and successfully complete the sale from the community of heirs. The next step deals with the alternatives if no consensus is reached on the sale.
Step 4: Examine alternatives to selling: payout and share of inheritance sale
What happens if a co-heir wants to keep the property? In this case, they can compensate the other heirs. The amount of compensation is based on the market value of the property and the respective inheritance share. This agreement must be documented in a notarial partition agreement. However, a co-heir does not have a legal claim to compensation; the other heirs do not have to agree. Another option is to sell one's own inheritance share. Each co-heir can sell their entire share to another co-heir or an external third party without needing the consent of the others (§ 2033 BGB). Selling the inheritance share offers a quick solution for liquidity, but often results in a lower return than a joint property sale. The co-heirs have a statutory right of first refusal for two months. These options are important when a co-heir blocks the sale.
Step 5: The partition auction as the last and most expensive option
If no agreement can be reached, any co-heir may apply for a partition auction at the competent district court. This process forcibly converts the property into cash. However, it is the worst of all solutions, as the proceeds often fall 15% to 30% below the actual market value. The applicant must also advance considerable costs. With a property value of €500,000, court and appraiser costs can quickly reach €8,000 to €10,000. Although these costs are later reimbursed from the proceeds, the financial risk in the event of the auction failing is borne solely by the applicant. The partition auction is a lengthy and expensive process that can permanently destroy family harmony. It should only be considered as a last resort. Professional mediation or a neutral valuation as a basis for arbitration is almost always the better approach.
Step 6: Calculate the net proceeds and consider taxes
After a successful sale, the net proceeds are determined. All communal costs are deducted from the notarised purchase price. The result is then divided according to the inheritance quotas. Each heir must individually pay tax on their share. Inheritance tax depends on the tax class and the personal allowances. For children, the allowance is €400,000, for spouses €500,000. Grandchildren have an allowance of €200,000. If the value of the inheritance share is below the allowance, no inheritance tax is due. Do not forget that gifts from the last 10 years can also be offset against the allowance. An inheritance tax calculator can provide an initial guide. The precise calculation of the costs and taxes is the final step to a completed settlement.
verkaufserloes-fair-in-der-erbengemeinschaft-aufteilen
Dividing the proceeds from the sale of a property in an inheritance community need not be an insurmountable obstacle. A structured process, beginning with an objective valuation and based on clear legal foundations, is key to success. Obtaining a neutral valuation report defuses the greatest potential for conflict from the outset and creates a fair basis for all subsequent steps. While a consensual sale represents the most profitable solution, exit options such as the sale of an inheritance share offer necessary flexibility. Forced partition auction remains the last resort, whose high financial and emotional costs are almost always avoidable. Proactive, transparent communication and a willingness to compromise not only secure the maximum proceeds but also maintain peace within the family. A fair process is always the result of good preparation.
Additional useful links
Statistisches Bundesamt (Destatis) offers press releases and statistical data that may also be relevant to the topic of inheritances.
Bundesfinanzministerium provides official and comprehensive information on inheritance and gift tax.
BORIS is the official portal for standard land values, which are essential for the objective assessment of real estate in the case of inheritance.
Haufe offers specialist articles and detailed information on the legal and tax aspects of real estate in a community of heirs.
Deutscher Anwaltverein provides information on training and relevant topics in inheritance law, including dealing with real estate.
Justiz Sachsen provides official brochures and further information on inheritance law.
FAQ
How long does it take to dissolve a community of heirs after the sale of a house?
Once the purchase price has been received in the notary escrow account, it usually takes only a few weeks. The notary settles the liabilities from the proceeds. As soon as all costs are paid and the settlement agreement is signed by all co-heirs, the net proceeds are distributed according to the inheritance shares.
What is a settlement agreement and is it mandatory?
A partition agreement is a written agreement in which all co-heirs regulate the distribution of the estate. It is not always mandatory, but strongly recommended to create legal certainty. As soon as a property is part of the estate, the contract regulating the transfer of ownership must be notarized.
Can a co-heir force the others to buy him out?
No, no co-heir has a legal claim to be paid out by the others. A payout is always a voluntary agreement between the heirs. If no agreement is reached, the only options remain selling one's own share of the inheritance or the partition auction of the property.
What are the allowances for inheritance tax?
The tax-free allowances depend on the degree of kinship. For spouses and civil partners, the allowance is €500,000, for children €400,000, for grandchildren €200,000, and for parents or grandparents €100,000. For all other heirs, such as siblings or friends, the allowance is €20,000.
What is the difference between selling the inheritance share and selling the property?
When selling the property, the community of heirs jointly sells the house to a third party. In the sale of an inheritance share, an individual co-heir sells only their share of the entire community of heirs (not just of the property) to a fellow heir or an external investor. The buyer then takes their place in the community of heirs.
How can Auctoa help with the distribution of the sales proceeds?
Auctoa provides a swift, data-driven, and neutral property valuation through AI-powered analysis. This objective appraisal serves as a fair foundation for all negotiations, whether it's setting the selling price, compensating a co-heir, or avoiding a partition auction. Our ImmoGPT chat can also answer initial strategy questions free of charge.
