Inheritance tax law and housing: Tax exemption for families required

Inheritance tax law and housing: Tax exemption for families required

Old-age poverty threatens many citizens, especially due to the comparatively low pensions in Germany, which are often not enough to cover rent and living costs. Although it should be in the state's own interest to reduce the proportion of tenants, this is not reflected in tax law. Families purchasing housing for their own use are subject to the same property transfer tax as other buyers, while countries such as Scandinavia and the Netherlands offer tax breaks for families.

In contrast to landlords, families cannot claim depreciation and have no access to the former home ownership allowance. Inheritance tax law does not offer comprehensive protection from taxation when families take over property they use themselves. Children must move into their parents' home within 6 months of the inheritance in order to receive tax exemption, whereby the exact move-in address is crucial.

Transfers of living space during your lifetime also do not offer any tax advantages. Children cannot inherit apartments tax-free if the parents move to age-appropriate accommodation or if the parents are resident in another EU country. Even if the parents are stuck in a property dispute with the property developer before their death, tax exemption for the children becomes complicated.

The current regulations in inheritance tax law regarding the tax exemption of owner-occupied housing treat similar cases differently, suggesting that an update and simplification is necessary. Instead of telling citizens where they must live in order to receive tax benefits, it would be more appropriate if every taxpayer could receive a tax-free living space of their choice from their parents, either during their lifetime or upon death.