Inherited a house: Here's how to accurately value your property after inheritance and save up to 30% in taxes
Are you faced with the task of valuing a house after an inheritance? A correct valuation is crucial to save thousands of euros in inheritance tax and to avoid conflicts within the heirs' community. This guide will show you in 5 steps how to accurately determine the value of your property.
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The topic briefly and concisely
The valuation of a house after an inheritance is crucial for the amount of inheritance tax and the distribution of the estate.
The tax office's blanket valuation often exceeds the real market value by 15-20% and should be reviewed by a counter-appraisal.
A professional market value appraisal takes into account individual defects and can reduce the tax burden by up to 30%.
The inheritance has occurred, and now you are the owner of a property. But what is the house really worth? This question is crucial not only for a potential sale but especially for the tax office. An incorrect or overestimated valuation can increase your tax burden by 20-30%. We show you how to systematically determine the value of your inherited property, avoid the pitfalls of tax office estimation, and create a data-driven basis for all your decisions.
In Brief: 5 Steps for Accurate Evaluation
An inherited property often presents heirs with the challenge of determining its exact value. This value forms the basis for inheritance tax and a fair distribution among co-heirs. A professional valuation can often reduce the tax burden by more than 20%.
Inform the tax office: You are legally required to report the inheritance to the tax office within three months.
Understand valuation methods: The tax office uses standardised procedures that often lead to an overvaluation of 15-20%.
Gather documents: A land register excerpt, building plans, and energy certificate are essential for an accurate valuation.
Obtain a professional valuation: An independent appraisal provides a realistic market value and can significantly reduce the tax burden.
Make a decision: With a valid value, you can make an informed decision on whether to sell, rent, or use the property yourself.
The standardised valuation by the tax office rarely considers individual defects, which can lead to an unnecessarily high tax demand. A counter-assessment is therefore often the first step towards optimisation.
Why an Accurate Property Valuation is Crucial After Inheritance
Immediately after an inheritance, the tax office confronts you with the assessment of inheritance tax. The basis for this assessment is the so-called market value of the property, which the authority determines according to its own, often general criteria. An overvaluation of just 10% can already increase your tax burden by several thousand euros.
However, accuracy in valuation is indispensable not only for tax reasons. If there is an inheritance community, the market value serves as a fair basis for the distribution of the estate or the payment of individual co-heirs. A value recognised by all parties, determined through an impartial appraisal, prevents conflicts that often arise in up to 40% of inheritance cases involving property assets. With a solid valuation basis, such as that provided by our Auctoa Inheritance Manager, you create transparency from the outset. This lays the foundation for a strategically sound decision about the future of the property.
The three assessment methods of the tax office and their pitfalls
The tax office uses standardised methods for valuation, as specified in the Valuation Act (BewG). Depending on the type of property, one of three methods is used, which you should be aware of:
Comparison method: For owner-occupied single-family houses and condominiums. Here, the selling prices of similar properties in the neighbourhood are used. The data often comes from purchase price collections that can be up to 12 months old and do not reflect current market dynamics.
Income method: For rented properties. The value is calculated from the rental income minus operating costs and using a property interest rate. Individual risks such as a potential rental default for 3-6 months are rarely taken into account.
Cost approach: When the other two methods cannot be applied. It is based on the pure construction costs of the building plus land value, minus a depreciation for age. Special features such as significant renovation needs are often only generally estimated at 5-10%.
These standardised approaches leave little room for the unique characteristics of your property, which often leads to an overvaluation. The next step, therefore, is to question this blanket estimate.
Counter-expertise: How to Save Taxes with a Professional Market Value Appraisal
If the value determined by the tax office seems too high to you, you have the right to challenge it with your own assessment. A qualified market value appraisal, created by an independent expert, is the most effective way to enforce a lower and more realistic valuation. The cost of such an appraisal starts at around 1,500 euros and can significantly reduce the inheritance tax burden. Such an appraisal takes into account factors that the tax office ignores, such as:
Structural damage and maintenance backlog (can reduce the value by up to 25%)
Energy deficiencies (e.g., old heating systems, lack of insulation)
Legal encumbrances (e.g., registered right of residence)
Unfavourable layout or poor location
A detailed appraisal can adjust the value set by the tax office by 15-30% in many cases. For an initial assessment, you can also use our inheritance tax calculator to calculate the savings potential. This provides a solid foundation for further action.
Checklist: These documents are required for a quick assessment
A quick and accurate assessment largely depends on the completeness of your documents. Good preparation can speed up the process by up to two weeks. Gather the following documents before contacting an appraiser or using a digital valuation tool:
Current land registry excerpt: No older than 3 months, providing information about ownership and encumbrances.
Building plans and floor plans: Scaled drawings of all floors.
Calculation of living and usable areas: Detailed list of areas according to the Living Areas Ordinance.
Energy certificate: Legally required and an important indicator of the energy condition.
Proof of modernisations: Invoices and receipts from the last 15 years (e.g., for heating, windows, roof).
For rented properties: Tenancy agreements and a list of current net cold rents.
With these documents, you enable a well-founded analysis and avoid time-consuming queries. This is the first step towards a well-informed sales decision, which you can further secure with our sales checklist.
Conclusion: Active action secures your legacy
The question "How do I value a house after an inheritance?" is more than a formality – it is a crucial lever in securing your wealth. Do not rely on the general estimates of the tax office, which often exceed market value by 20%. Take control of the valuation by requesting a professional, data-driven analysis. A precise appraisal not only protects you from an excessive tax burden but also creates a fair basis for decisions within an heir community. Use tools like the ImmoGPT chat from Auctoa for an initial, free orientation. A well-founded valuation is the best investment in the future of your inherited assets.
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Additional useful links
Bundesfinanzministerium provides comprehensive information on inheritance and gift tax in Germany.
Bundesfinanzministerium provides a BMF letter on the assessment of lifetime use or performance available from 1 January 2024.
Statistisches Bundesamt provides information on construction prices and the property price index in Germany.
Statistisches Bundesamt offers detailed tables on house prices and building land.
Bundesbank publishes statistics on real estate and construction service prices.
BORIS is the central portal for querying standard land values in Germany.
FAQ
Do I have to accept the value determined by the tax office for my inherited house?
No. You have the right to contest the tax office's decision and provide your own qualified market value appraisal to prove a lower, more realistic value. This often results in a significant reduction of inheritance tax.
Which valuation method is right for my inherited house?
This depends on the type of property. For owner-occupied houses and apartments, the comparative value method is usually applied. For rented properties, the income value method is common. An expert always chooses the method that best reflects the actual value.
What happens if the co-heirs cannot agree on a value?
If an agreement cannot be reached, a neutral market value appraisal by a certified expert is the best solution. This appraisal serves as an objective basis for the inheritance settlement and is also recognized in court disputes.
How quickly can a property valuation be carried out after an inheritance?
The duration depends on the availability of the documents and the workload of the assessor. If all documents, such as the land register extract and building plans, are available, an evaluation can often be completed within 2-4 weeks.
Does an usufructuary right or right of residence reduce the value of the property?
Yes, significantly. A usufruct or right of residence registered in the land register severely restricts the use and exploitation of the property. This circumstance is taken into account in a professional appraisal as a depreciation and significantly reduces the tax assessment base for inheritance tax.
What is the difference between market value and standard value?
The market value (or market price) is the price that could currently be achieved for the property on the market. The standard value is an outdated tax assessment basis that has not been used for inheritance tax calculation since the inheritance tax reform in 2009.
