Inheritance Manager
Real Estate Legal Information
Inherited apartment, what are the next steps?
An inherited apartment raises many questions. This guide provides you with a clear roadmap to set the right financial and legal course. This way, you can turn a complex situation into a strategic opportunity.
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Within two years of the inheritance event, the land registry correction is free of charge.
The inheritance must be reported to the tax office within three months.
An objective property valuation is the crucial basis for all subsequent steps, such as selling, renting, or dividing an inheritance among heirs.
You have inherited a flat and are wondering what the next steps are? This situation combines the emotional value of the inheritance with significant financial responsibility. Many heirs feel overwhelmed by the tasks ahead – from updating the land register to inheritance tax. This article systematically guides you through the seven most important phases. You'll receive data-driven recommendations and practical tips to make informed decisions and avoid costly mistakes. With the right strategy, you secure the value of your inheritance for the future.
After inheriting a flat, the next steps are legal in nature. First, you need to have your ownership officially recognised. For this, you usually need a certificate of inheritance, which you can apply for at the probate court. If there is a notarised will, this document may suffice. Subsequently, it is mandatory to update the land register. If you submit the application within two years of the inheritance, the usual fees of several hundred or thousand euros are waived. Note the six-week deadline from the time you become aware of the inheritance if you wish to disclaim it, for example, due to high debt. These basic measures create the foundation for all further considerations.
One of the most important duties is to report the inheritance to the tax office, which must be done within three months. The tax office then checks whether and how much inheritance tax is due. The amount depends on the market value of the property and your degree of kinship to the deceased. For spouses, there is an allowance of €500,000, and for children, €400,000. Siblings or nieces and nephews have a significantly lower allowance of €20,000. An exception exists if you, as a spouse or civil partner, continue to live in the home for at least ten more years – in this case, the tax may be waived. A precise calculation is crucial to avoid financial bottlenecks, and an early tax calculation provides you with planning security.
Before deciding what should be done with the inherited flat, you need a realistic assessment of its value. A professional and data-driven valuation is the foundation for all further financial considerations. The value determined by the tax office may differ from the actual market value. An independent assessment protects you from misjudgements that could cost you thousands of euros. Modern AI-powered tools like the Auctoa Inheritance Manager provide you with a precise analysis in no time. This way, you know exactly what your inherited property is worth and can act based on facts rather than emotions. This valuation is essential not only for tax purposes but also for sales negotiations or distribution in a community of heirs.
If you haven't inherited the property alone, but with other people, you form a community of heirs. In this community, all decisions must be made unanimously, which often leads to conflicts. The management and ongoing costs, such as property tax or repairs, must be shared by all co-heirs. To avoid lengthy and costly disputes, a clear strategy is necessary. Here are the most common solutions:
Joint Sale: The property is sold and the proceeds are divided according to the inheritance shares. This is often the simplest solution.
Buyout: One heir takes over the property and pays off the other co-heirs. This requires an accurate valuation and the necessary liquidity.
Joint Renting: The heirs become a community of landlords. This secures ongoing income, but also requires joint management.
Partition Auction: If the heirs cannot agree, any co-heir can apply for a public auction. However, this often leads to financial losses of 15-20% below market value.
An external decision aid for communities of heirs can help determine the best option objectively.
The central question regarding the initial steps is: What should be done with the inherited apartment? Each of the three main options has specific financial and personal consequences. Careful consideration is crucial for long-term success. A calculator for selling or renting can provide some initial guidance.
Here is an overview of the options:
Selling: This offers quick liquidity and frees you from the responsibility of maintenance. Check the speculation period: If less than ten years have passed between the original purchase by the deceased and the sale, the profit is subject to speculation tax.
Renting: This option creates a long-term income source and preserves the property's value. However, consider the administrative effort and maintenance costs, which can quickly reach 1-2 Euros per square metre per month.
Personal use: You save on rent and can preserve the emotional value of the inheritance. This option can exempt you from inheritance tax if you live in the apartment for at least 10 years. However, you must personally cover all ongoing costs and any potential renovations.
Inheriting a flat also means taking on all ongoing costs. These include the monthly service charges, property tax, insurance, and contributions to the repair reserve of the owners' association. These costs can quickly add up to several hundred euros per month. Pay special attention to the condition of the property. Inheriting a house in need of renovation can lead to unforeseen expenses. Have the condition of the building structure, heating, and windows checked to realistically assess the financial effort required for necessary modernisations. This analysis is crucial in determining the profitability of renting or the fair selling price.
If the decision is made to sell, a well-thought-out strategy is the final step. A detailed checklist for selling property helps ensure nothing is overlooked. Clarify the tax aspects in advance. The most important rule is the ten-year speculation period. If this period has not yet expired since the purchase by the testator, you will have to tax the profit from the sale at your personal income tax rate. An exception applies if there has been owner-occupation in the year of sale and the two preceding years. A careful evaluation of which taxes arise when selling protects against unpleasant surprises and maximises your net proceeds.
If you have inherited an apartment, the next steps are clearly structured: from legal security to tax assessment to the final decision. An objective, data-driven analysis is key to avoiding emotional and often costly mistakes. Use professional tools like the Auctoa ImmoGPT to gain clarity quickly and neutrally. A planned approach transforms initial uncertainty into a well-founded and value-enhancing decision. This ensures that the inheritance becomes a real gain.
The Federal Ministry of Finance provides comprehensive information on inheritance and gift tax.
A detailed article about inheritance tax in Germany is available on Wikipedia.
The Economic Service analyzes the declining revenues from inheritance and gift tax.
You can find the full text of the law regarding § 1931 BGB (Statutory succession of the spouse) on Gesetze im Internet.
The Federal Statistical Office provides information about construction prices and real estate price indices.
The Federal Statistical Office offers detailed tables on house and land prices.
What are the very first steps if I have inherited a property?
Decide whether you want to accept the inheritance (6-week deadline for renunciation). Apply for a certificate of inheritance or use a notarised will as proof. Then have the land register corrected to your name.
What is the allowance for inheritance tax?
The allowance depends on the degree of kinship. For spouses, it is €500,000; for children, €400,000; for grandchildren, €200,000; and for siblings and most other heirs, only €20,000.
What is a certificate of inheritance and do I always need it?
The certificate of inheritance is an official document that identifies you as the legitimate heir. You need it for the land register correction if there is no notarised will or inheritance contract. Applying for it incurs a fee.
Who bears the ongoing costs of the inherited property?
Until the final decision about the property (sale, rental, etc.), the heir(s) (the community of heirs) must cover all ongoing costs such as service charges, property tax, insurance, and any loan installments.
What does the ten-year rule mean when selling?
This period refers to the speculation tax. If you sell the inherited property before the deceased owned it for ten years, you must tax the profit made. The period starts with the purchase date of the deceased, not the date of inheritance.
What to do if the community of heirs cannot agree?
If no agreement can be reached on sale, rental, or payout, any co-heir can apply for a partition auction at the district court. This is often the least economically advantageous solution, as the proceeds are usually below the open market value.
