Donnerstag, 22.06.2023
The family home in the context of inheritance and tax law
from
Lucas BellLawyer
Specialist tax lawyer
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In inheritance and gift tax law, there are various tax exemptions to reduce the tax burden when transferring assets within the family. One of the most important exemptions is the exemption of the family home. This exemption applies to both gifts and inheritances, although different conditions must be met.
A family home is a property in which the testator or donor lives and which is also the center of family life. This means that there may be several family homes over the course of a lifetime, but only one at a time. Holiday homes or second homes are not covered by the exemption. Which of the residences is considered a family home is determined not by the legal registration situation, but by the actual circumstances. If the testator owns an apartment building, for example, only the apartment they live in themselves is eligible for the exemption, and not the other apartments.
No special requirements must be met for lifetime gifts of a family home. The exemption applies to the transfer of ownership in whole or in part, as well as to the assumption of costs for the acquisition, construction or maintenance of the family home.
In the case of inheritances of family homes, however, the conditions for exemption are stricter. The testator must have used the family home themselves up until the time of their death. Exceptions are only considered in a few cases, for example if the testator was no longer able to run their own household. The heir must live in the family home for at least ten years and move into the family home immediately after the death of the testator. Exceeding these deadlines is only possible in a few exceptional cases.
There are also certain deadlines that the heir must meet in order to receive the exemption. If the allowances are exceeded, taxation will occur, which without the exemption of the family home can lead to a considerable tax burden. Therefore, this exemption has become more important in recent years and decades due to the increase in real estate values.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.