Gift tax
November 9, 2021 | 35,00 EUR | answered by Steuerberater Knut Christiansen
Hello,
the ownership of my mother's semi-detached house was notarially transferred to me (son) in 1994. My mother has the usufruct right.
The value of the semi-detached house is approximately 600,000 euros (Bavaria). Would there be a gift tax when the usufruct right is deleted? How high would it be in tax class 3?
If my mother were to move to a nursing home, would the social welfare office have a claim to the rental income from the semi-detached house?
Hello,
I am happy to provide you with the following initial assessment regarding your question.
If your mother waives her right to usufruct, this constitutes a gift to you, which is generally subject to gift tax. However, gift tax is only due on gifts to children if the total value of gifts, including the relevant gifts made in the last 10 years, exceeds the tax-free allowance of 400,000 EUR. In order to determine whether gift tax is due, one would need to know the gifts made in the last 10 years, and also calculate the value of the usufruct (which is not possible for the fee provided). The value of the usufruct is determined by the annual income (fictional) of the property, taking into account a multiplier based on your mother's age. For example: annual rent (cold) 20,000 EUR, multiplier 8 = value of the usufruct 160,000 EUR (simplified calculation). In addition, as a child, you would fall into tax class 1 under gift tax law (not to be confused with income tax class).
If your mother needs to move to a nursing home and still has rental income, she must use this income to cover the costs of the nursing home. Therefore, the social welfare office may access the rental income for this purpose.
I hope this answers your question, and if not, please feel free to ask further questions at no cost.
I would like to remind you that this forum cannot replace a comprehensive and personalized tax consultation, but is primarily intended to provide an initial tax assessment. By adding or omitting relevant information, the legal assessment of your situation may vary.
Best regards,
Knut Christiansen
Tax Advisor
