Inheriting, donating or (partially) selling real estate: advantages and disadvantages after taxes and risks

Inheriting, donating or (partially) selling real estate: advantages and disadvantages after taxes and risks

According to a report from www.mdr.de,

Deciding what to do with a property as you age is an important question that concerns many people. There are various options, such as inheritance, donation and (partial) sale of a property. Each option has advantages and disadvantages that need to be taken into account.

Inheritance tax is due when a property is inherited, and the only person liable to pay the tax is the heir. Notary costs can be avoided because a will does not have to be notarized. However, there is a risk that the transfer may be reversed through claims for a compulsory portion.

In the case of a donation, gift tax is due, which can be borne by the donor and the purchaser. A donation agreement must be notarized, which leads to additional costs. There is the possibility of reversing the donation under certain circumstances.

When a property is (partially) sold, property transfer tax is due, which can be borne by both the seller and the buyer. A purchase contract must be notarized, which also leads to additional costs. However, there is no possibility of canceling the purchase contract.

The real estate market is influenced by these different options. Due to the tax and financial aspects, many people may be inclined to give away or partially sell their properties during their lifetime in order to save taxes or get money quickly. This could lead to a change in the supply of properties on the market, which could ultimately impact prices.

It is important that potential home sellers and buyers carefully weigh the pros and cons of different options to make the best decision for them.