Can real estate be inherited tax-free?
September 4, 2022 | 40,00 EUR | answered by Alwin Widmann
Dear tax advisor,
My name is Hildegard Pilz and I have a question regarding inheritance tax. My situation is as follows: My husband and I own a single-family house that we would like to pass on to our children. Now the question arises whether it is possible to inherit real estate tax-free.
I am concerned that my children may have to pay high taxes after our passing and thus be financially burdened. We would like to ensure that our property passes on to our descendants without significant costs.
Are there ways to inherit real estate tax-free? What tax aspects need to be considered? Are there specific requirements that must be met to avoid taxes?
I would be very grateful if you could provide me with more information on this topic and suggest possible solutions. It is important to us to leave our children with financial security and therefore we would like to be informed about all options.
Thank you in advance for your support and advice.
Sincerely,
Hildegard Pilz
Dear Mrs. Pilz,
Thank you for your question regarding inheritance tax in relation to passing on your property to your children. It is understandable that you are concerned about your children having to pay high taxes and you want to ensure that your property is transferred to your descendants without major costs.
Unfortunately, it is not possible to inherit properties completely tax-free. Inheritance tax is a tax levied on the value of inherited assets, including real estate. The amount of tax depends on the relationship between the deceased and the heirs, as well as the value of the assets.
However, there are ways to minimize the inheritance tax burden. One option is timely planning and structuring of the estate. By using exemptions and tax classes, you can reduce the tax burden. For example, there are high exemptions for spouses and children that can be utilized in the inheritance of properties.
Furthermore, you can reduce the inheritance tax burden through lifetime gifts. By making regular gifts, you can gradually reduce the value of your assets and therefore lessen the tax burden for your children. It is important to ensure that gifts fall within certain exemptions to avoid tax consequences.
Another aspect to consider is the valuation of the property. The value of the property is used in the calculation of inheritance tax. A realistic and accurate valuation can help to minimize the tax burden.
It is advisable to seek advice from an experienced tax advisor to find the best solution for your individual situation. A tax advisor can help you consider the tax aspects, meet requirements, and suggest possible planning options.
I hope this information has been helpful to you. If you have any further questions or would like individual advice, I am at your disposal.
Sincerely,
Alwin Widmann
