What tax measures can I take to inherit my property in a tax-optimized way?
August 8, 2023 | 50,00 EUR | answered by Mia Pilz
Dear tax advisor,
my name is Selma Hahn and I have a question regarding the tax aspects of inheriting my property. Currently, I own a condominium that I would like to pass on to my heirs in a tax-efficient manner. I am worried that my heirs could be burdened by high inheritance taxes and would like to know what tax measures I can take to avoid this.
The current situation is as follows: The property has a current market value of 300,000 euros and I have two heirs, my children Lisa and Max. The tax-free allowance for each heir is 400,000 euros, so no inheritance tax is due. However, I am concerned that the tax situation could change if the market value of the property increases or if tax laws change.
My concerns are that in the event of my death, my children may have to pay high taxes and could be financially burdened. Therefore, I would like to plan ahead and pass on the property in a tax-efficient manner. What options are there to reduce or avoid the tax burden for my heirs? Are there any tax measures that I can take during my lifetime to optimize the inheritance tax?
I look forward to your professional advice and thank you in advance for your help.
Sincerely,
Selma Hahn
Dear Selma Hahn,
Thank you for your inquiry regarding the tax aspects of inheriting your property. It is understandable that you are concerned about how to protect your heirs from a high tax burden. I am happy to explain to you some tax measures you can take to optimize the inheritance of your property.
Firstly, it is important to know that the amount of inheritance tax depends on various factors, such as the market value of the property, the relationship between the deceased and the heirs, and the respective tax exemption. In your case, you mentioned that the tax exemption for each heir is 400,000 euros, so currently no inheritance tax is due. However, the tax situation could change if the market value of the property increases or if tax laws change.
To reduce or avoid the tax burden for your heirs, you can take various tax measures. One option would be to transfer the property to your heirs during your lifetime. Through an anticipated succession, you can reduce the tax burden, as any potential increase in the property's value after the gift will not be subject to inheritance tax. However, you should be aware that gifts may also be subject to gift tax under certain circumstances.
Another option would be to engage in tax-optimized estate planning. For example, you can use specific tax exemptions and tax brackets to minimize the tax burden for your heirs. Establishing lifetime usufruct or residence rights can also offer tax benefits.
It is advisable to seek advice from an experienced tax advisor or notary to determine the appropriate tax measures for your individual situation. Each case is unique and requires individual consultation to minimize tax risks and optimize the inheritance process.
I hope this information is helpful to you and I am available for any further questions.
Best regards,
Mia Pilz, Tax Advisor
