Inherit real estate, avoid stress

Inheritances often lead to disputes within families, especially when several family members form a community of heirs. It is about the value of the real estate, inheritance tax, reorganisation obligations and the further realisation of the real estate - often also about the very personal clarification of old disputes.

The circumstances to be taken into account for inheritances have changed in recent months. The Annual Tax Act of December 2022 also amended the Valuation Act. This affects the underlying value of real estate for inheritance tax. Since the beginning of 2023, many heirs must expect a much higher inheritance tax. This is because the value of the inherited real estate is set higher, while the tax allowances have remained the same.

In addition, heirs to older existing properties are subject to renovation obligations if the insulation and heating system are no longer up to date. According to the Building Energy Act (GEG), heirs are obliged to insulate the top floor ceiling of an unheated attic or the roof after two years at the latest. Oil and gas boilers over 30 years old must be replaced if they are not based on low-temperature or condensing technology. Pipes for heating and hot water in unheated rooms must be insulated.

If there is no will or the will provides for several different beneficiaries, the dispute is often programmed. Often the inherited houses stand empty for months or even years because no agreement can be reached. The community of heirs can quickly incur renovation costs of between 50,000 and 150,000 euros. However, it is not advisable for communities of heirs to simply sit out the renovation issue, because according to the Building Energy Act, a fine of 50,000 euros is due if heirs do not comply with their legal obligation to renovate.

The easiest way to divide an inheritance is to sell the real estate property, because money is easier to divide than a flat or a house. It becomes difficult if an heir lives in the house or wants to use all or part of it in the future. Compromises can often be found more easily if neutral advice is sought, such as a mediator with experience in inheritance matters.   

(Photo: © ID 9685995, Pixabay)