Real estate valuation in the context of an inheritance

Real estate market / real estate valuation: There are very many reasons to have a real estate valuation carried out for a real estate object. Apart from the always necessary evaluation in the context of a planned house sale or with the purchase of a house the inheritance controversy, the divorce, the donation of a real estate or the forced sale are further important reasons to make a real estate evaluation. This article is about the real estate valuation in the context of an inheritance.

In the context of a real estate evaluation for the regulations of an inheritance it is to be distinguished whether it concerns an individual heir or a community of heirs. Naturally, in the case of a single heir, the highest possible value of the property is not as desirable (inheritance tax) as in the case of a community of heirs, where everyone wants to get the maximum for themselves. In any case, an independent real estate valuation must be carried out by a professional.

Legal regulations in the case of inheritance by an heir

The legislator prescribes for the inheritance, like also the donation of real estates, a valuation of the real estate. The state's interest here is primarily in the achievable inheritance or. Gift tax. Inheritance tax depends on the market value and the underlying family relationship.

There is no inheritance tax if the heir himself lives in the inherited house for at least ten years. During this time, however, he must adhere to some requirements. In order to maintain the exemption from inheritance tax, it is forbidden to sell, rent or lease the property. Maximum areas are also prescribed with regard to the size of the house / apartment. Thus, if the children want to inherit free of inheritance tax, the living space must not exceed 200 square meters.

If the real estate heir has no interest in occupying the inherited property himself, inheritance tax is due. This is then based on the market value of the property based on an existing property valuation. A small reduction in the amount of inheritance tax is possible if the inherited property is rented out for residential purposes. In this case, the tax liability from the inheritance tax is calculated only from a market value reduced by 10%.

Legal regulations in the case of inheritance by a community of heirs

If several heirs (preferably with equal rights) are involved in the real estate inheritance, they form a community of heirs by law. This means that the community has to decide on the distribution of the inheritance. This is usually quite problematic, which is why the legislator has made a provision for these cases.

The legal provisions stipulate that the inheritance is first divided naturally, d.h. That each heir helps himself from the estate until the estate is divided. This is certainly possible in the case of valuables, but the rule does not apply to a house or condominium. The value of the property is usually higher than the respective share of the heirs. Then other rules have to take effect.

Sibling love comes after the market value appraisal

If one of the inheriting siblings wants to use the property alone, he or she must of course compensate the co-heirs accordingly. The basis for this is a real estate appraisal, which is carried out by a real estate expert. The fair market value determined in this way can then be used as the basis for an equalization payment.

Partition auction in case of non-agreement

If the heirs cannot agree on a distribution mode, the property may be foreclosed on. It often comes to the situation that only one heir applies for the compulsory auction. This procedure is then called a partition auction, since its only purpose is to sell the house, resp. to divide the house value. In this procedure, each of the heirs can then purchase the part of the inheritance up for auction themselves. The basis for the partition auction is a real estate appraisal by a sworn expert commissioned by the district court.