How is the value of real estate calculated for inheritance tax?
October 25, 2022 | 50,00 EUR | answered by Ella König
Dear tax advisor,
My name is Benjamin Kock and I am facing a complex situation regarding inheritance tax. Unfortunately, my father has passed away and has left me a property. Now I am wondering how the value of this property will be determined for the calculation of inheritance tax. I have done some research already, but I am unsure about which factors need to be considered in the valuation.
The property I have inherited is a single-family house in good condition located in a sought-after residential area. However, I do not have exact information about the current market value of the property and I am unsure about how to determine it. Additionally, I am concerned about the amount of inheritance tax that could be levied on the value of the property.
My question to you as an experienced tax advisor is: How is the value of properties calculated for inheritance tax purposes? Which criteria are taken into account in the valuation and how can I ensure that the value of my inherited property is correctly determined? Are there ways to minimize the inheritance tax burden?
I would greatly appreciate your expert assistance and advice on this matter. Thank you in advance for your help.
Sincerely,
Benjamin Kock
Dear Mr. Kock,
Thank you for your inquiry regarding inheritance tax and the valuation of real estate. Indeed, calculating the value of an inherited property for inheritance tax is a complex issue that takes into account many factors.
First and foremost, I would like to inform you that the value of a property for inheritance tax must be determined by an independent appraiser or expert. This appraiser will determine the current market value of the property based on various criteria, such as location, size, condition, year of construction, and amenities. It is important that the appraiser has the necessary expertise and evaluates the property objectively to avoid disputes with the tax authorities.
However, there is also the option to determine the value of the property yourself by using various real estate portals and comparable properties. Please note that this method is not as precise as an expert appraisal and may lead to discrepancies.
When calculating inheritance tax, the determined value of the property is taken into account along with other assets of the inheritance. Depending on the relationship between the deceased and the heirs, as well as the value of the inheritance, there are different tax exemptions and rates. Therefore, it is advisable to inform yourself early on about the tax implications of the inheritance in order to assess any potential financial burdens.
To minimize the inheritance tax burden, there are various options that can be applied depending on individual circumstances. These include utilizing tax exemptions, timely gifting of assets during one's lifetime, or establishing tax-optimized wills. It is advisable to seek advice from an experienced tax advisor to develop the best possible strategy for your personal situation.
I hope that my explanations have helped clarify your question. If you have any further questions or would like detailed advice, I am at your disposal.
Best regards,
Ella König
