Do I have to pay inheritance tax if I inherit a property?
April 24, 2022 | 40,00 EUR | answered by Wilhelm Ackermann
Dear tax advisor,
I am facing a difficult situation and hope that you can help me. My aunt recently passed away and left me a property in her will. Now I am worried about whether I have to pay inheritance tax if I inherit the property.
Regarding the situation: My aunt was childless and had no closer relatives other than me. The property she left me has an estimated value of 500,000 euros. I am married and have two children. I have never dealt with inheritance tax before and am unsure of how high the tax could be.
Currently, I would like to keep the property as it holds great emotional value for me. However, I also want to avoid financial burdens from inheritance tax to secure my family's future.
My concerns are that I do not know how high the inheritance tax could be and if I can afford to pay it. Additionally, I am unsure if there are ways to reduce or avoid the tax burden.
Therefore, my question to you is: Do I have to pay inheritance tax if I inherit a property? What factors are involved in calculating inheritance tax and are there ways to reduce the tax burden? I would be very grateful for your assessment and possible solutions.
Thank you in advance.
Kind regards,
Norbert Busse
Dear Norbert Busse,
Thank you for your inquiry regarding inheritance tax related to the property that your aunt left you. It is understandable that you are concerned and uncertain about possible tax liabilities. I would like to help you and provide you with some information on this topic.
Firstly, I must inform you that inheritance tax is generally levied on the value of the inherited assets. In your case, the estimated value of the property is 500,000 euros. It is important to note that spouses and children in Germany have a tax-free allowance of 500,000 euros each for inheritance tax. Since you are married and have two children, it is possible that you may fully utilize the tax-free allowance and not have to pay any inheritance tax.
However, it is important to consider that the tax-free allowance can be used every 10 years. If your aunt has gifted assets to you in the past 10 years, this may have already partially utilized the tax-free allowance and increased the inheritance tax.
Furthermore, there are various ways to reduce the inheritance tax burden. One option, for example, could be to initially rent out the property and sell it at a later date. This could help spread out the tax burden and possibly benefit from lower tax rates. You could also consider gifting part of the property to increase the tax-free allowance.
However, it is advisable to seek advice from a tax advisor in such cases to develop the best possible solutions based on your individual situation. I am also available to personally analyze your specific situation and offer tailored solutions.
I hope that this information has been helpful to you and I am available for any further questions you may have.
Best regards,
Wilhelm Ackermann
