You have inherited a house and are wondering: What is my inherited house really worth? This question is crucial because a misjudgment can cost you thousands of euros. We show you how to objectively determine the real market value and make an informed decision for your future.
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The topic briefly and concisely
The true value of an inherited house is determined by a combination of location, condition, energy efficiency, and legal framework, not by emotional attachment.
The tax office uses standardised procedures that often lead to higher valuations since 2023; a counter-appraisal can reduce inheritance tax by up to 20%.
Three official methods are applied: the comparative value method for standard properties, the real value method for owner-occupied houses, and the income value method for rental properties.
Inheriting a property is often accompanied by emotions, yet for financial and legal decisions, only the objective market value counts. Many heirs risk financial disadvantages by relying on outdated estimates or the tax office's standardised procedure, which often leads to a higher tax burden since 2023. A precise, data-driven valuation is therefore not an optional step, but the most important foundation for handling the inheritance. This guide takes you through the crucial factors and recognised procedures so you can understand the true value of your inherited house and avoid costly mistakes. This creates a solid basis for the next steps, whether it's selling, renting out, or self-use.
The Essentials at a Glance
The true value of an inherited house is determined by a combination of location, condition, energy efficiency, and legal framework, not by emotional attachment.
The tax office uses standardised procedures, which often lead to higher valuations since 2023; a counter-expert opinion can reduce inheritance tax by up to 20%.
Three official methods apply: the comparative value method for standard properties, the intrinsic value method for owner-occupied houses, and the income value method for rental properties.
Hidden costs, such as a renovation backlog of over €400 per square metre or conflicts within the heir community, can significantly reduce the value.
Recognizing the true value: More than just four walls
An inherited house is a place full of memories, but its market value is determined by hard facts. The emotional value and the price achievable on the market often differ by more than 15%. The first and most important task for you as an heir is to strictly separate these two values. An objective valuation not only protects you from disappointments but is also the legal basis for allocation in an heir community and for determining inheritance tax. Without a neutral numerical basis, conflicts are pre-programmed and financial losses are almost inevitable. A realistic assessment is the compass for all further considerations, as you can read in our guide to valuation of inherited properties. This objective viewpoint enables setting the right course for the property's future.
The 7 Key Value Drivers of Your Inherited Property
What is an inherited house really worth? The answer depends on seven key factors that appraisers and buyers analyse. A precise understanding of these drivers is essential for realistic pricing.
Here are the main points:
The location (Macro & Micro): The region and the immediate surroundings are the biggest value drivers. A house in a metropolitan area can cost three times as much as a comparable property in a rural area.
The standard land value: This official average value for plots in your zone is the basis of any evaluation. You can view it online on the BORIS-D portal.
The building fabric and condition: Age, construction materials, and any damage are crucial. A 100-year-old house often needs more renovation than a building from the 1980s.
Energy efficiency: A poor energy rating (Class G or H) can reduce the value by up to 20%. An energy certificate is mandatory for sale or rental.
The fittings: Modern bathrooms, a high-quality heating system, or a well-maintained garden increase the value. Outdated features lead to deductions often exceeding 15,000 euros.
The size and layout: Not only the living area in square metres counts, but also a modern, functional layout. Poorly designed rooms reduce demand.
Legal circumstances: Encumbrances in the land register, such as lifetime occupancy rights or rights of way, can reduce the market value by more than 25%.
Each of these points must be carefully examined to obtain a complete picture and not over- or underestimate the value.
How the Value is Determined: The 3 Official Methods
In Germany, the Property Valuation Ordinance (ImmoWertV) regulates three recognised methods for calculating the market value. Which method is applied depends on the type and use of your inherited house. The choice of the correct method is crucial for an accurate result.
These are the three methods:
Comparison Method: This method is most frequently used for owner-occupied single-family houses and condominiums in areas with sufficient sales cases. The value is derived from the actual sale prices of similar properties in the neighbourhood. It is considered particularly market-oriented.
Cost Approach: If there are no comparable properties, this method is used. It determines what it would cost to rebuild the house today, deducting an age-related depreciation. The land value is then added.
Income Approach: This method is the standard for rented properties. It is based on the future expected rental income, minus the management costs and the land value.
Often, experts combine two methods to make the result more plausible. An overview of how to calculate the value of your inherited property aids in classification. These methods form the basis of any serious valuation, whether for the tax office or a potential buyer.
Hidden Risks: These Factors Diminish the Value
In addition to the obvious features, there often lurk undiscovered cost factors that can significantly diminish the value of your inherited property. An undiscovered backlog of renovations is one of the most common reasons for a depreciation. The costs for an energy-efficient renovation can quickly exceed 400 to 800 euros per square metre. Especially for houses from the 1970s, the costs for the roof, windows, and heating often add up to over 100,000 euros. Another critical point is the community of heirs. If the co-heirs cannot agree on a common strategy, this often leads to sales pressure that can reduce the price by up to 30%. Legal encumbrances such as a usufruct right registered in the land registry or a permanent burden also considerably reduce the market value. Therefore, clarify at an early stage whether a house in need of renovation has been inherited and what obligations are associated with it. An early and honest analysis of these risks protects against unpleasant surprises in the sale or rental process.
Tax Office vs. Market Reality: Two Values, One Property
Following an inheritance, the tax office will contact you and request an inheritance tax declaration. For valuation, the authority uses standardized procedures that often inadequately reflect the actual condition of the property. Since a change in the law at the end of 2022, these valuations tend to be about 20 to 30% higher than before. The result is a potentially excessive tax burden for you. However, you are not bound by the tax office's valuation. You have the right to demonstrate a lower, actual market value through a qualified appraisal. This is particularly important if there are value-reducing factors such as a backlog of renovations, construction defects, or a poor location, which the tax office does not take into account. Such a counter-assessment can often reduce the inheritance tax by several thousand euros. Find out how to determine the market value for the tax office to be optimally prepared. Therefore, the effort for your own appraisal is worthwhile in most cases.
Assessment in the practical test: From online tools to the expert
To determine the true value of your inherited home, there are several options available to you, which vary greatly in cost and accuracy. Free online calculators provide an initial guide, but their results can deviate from the real value by up to 20%. An appraisal by an estate agent is often free, but may be influenced by sales interests. The most accurate method is a market value appraisal by a certified expert. The costs for this range between 0.5% and 1.5% of the property's value, often exceeding 2,500 euros, but the appraisal is recognized by courts and tax authorities. A modern alternative is offered by Auctoa: We combine AI-powered data analysis with expert knowledge from appraisers. This provides you with a quick, neutral, and cost-effective evaluation that serves as a sound basis for decision-making. If you would like an initial assessment, you can now chat for free with our ImmoGPT. This data-driven analysis helps you develop the right strategy for your property, whether it be a sale or rental.
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The question “What is my inherited house really worth?” cannot be answered with a gut feeling or a quick glance at property websites. The true value is a complex sum of location, condition, legal factors, and the current market situation. An inaccurate estimate can lead to family conflicts, excessive inheritance tax, or selling below value, with losses quickly reaching five-figure sums. A professional, data-driven valuation is therefore not an expense, but an investment in your financial security. It establishes an indisputable basis for all further steps and gives you back control over your inheritance. Your informed decision begins with a single, objective number.
Additional useful links
The Statistical Office of Germany provides tables and data on house and land prices in Germany.
The Federal Ministry of Finance offers comprehensive information on inheritance and gift tax in Germany.
Wikipedia provides an overview of the topic of property valuation.
The Deutsche Bundesbank supplies statistics and indicators on the German residential property market.
The National Association of German Cooperative Banks (BVR) publishes a study on real estate price developments.
Under Gesetze im Internet, you can find the current Real Estate Valuation Regulation (ImmoWertV) of 2022.
The German Association of Cities offers an analysis of the residential property market for the year 2024.
FAQ
What documents do I need for a property valuation?
To conduct an accurate valuation, you will need a current land registry extract, a site plan, building drawings (floor plans, sections), a living space calculation, the energy performance certificate, and evidence of modernisations from the last 15 years.
What is the cost of an official valuation for an inherited house?
The cost for a court-proof market value appraisal by a certified expert is usually between 0.5% and 1.5% of the determined property value. For a house valued at €400,000, this would be approximately €2,000 to €6,000.
Do I need to renew the energy certificate if I have inherited?
Not immediately. The obligation to present a valid energy certificate (no older than 10 years) only arises when you sell, rent out, or lease the house again. The costs for this range from €100 to €500, depending on the type of certificate.
What is the difference between market value and land reference value?
The standard land value is simply the average value of the undeveloped land per square meter in a specific area. The market value is the price for the entire property, including land plus buildings, and takes into account individual features like the condition, amenities, and age of the house.
How does a community of heirs affect the value?
Disagreements within an inheritance community can lead to sales delays or even a partition auction. This sales pressure can depress the achievable price by up to 30% below the actual market value.
Can I deduct the cost of the appraisal from my taxes?
Yes, if you have the appraisal prepared to sell the property, the costs can be claimed as advertising expenses against the income from the sale. If it is used for determining inheritance tax, the costs are deductible as an estate liability.
