In the event of a death, there is usually not much time to mourn if the inheritance is an apartment. As the heir, you will then have to deal with the following questions, and within a specified period: Should the heritage be accepted or rejected?
Are you the sole heir, or are there co-heirs? Can the house be inherited tax-free? How is the land register entry changed? Should the house be used, rented, or sold by the owner? What taxes are payable on inheritance?
We have compiled the answers for you in our guide article.
Inherited house – The most important aspects at a glance
- Checking whether the inheritance has retained its value or is over-indebted
- Apply for inspection of the land register
- Do not exceed a disclaimer period of 6 weeks
- Avoid inheritance disputes in order to prevent partition auctions
- Consider inheritance tax and check how to avoid it
- Have the land register entry corrected on acceptance of the inheritance
- Examine options for self-use, rental or sale
Should the inheritance be accepted or rejected?
When you inherit an apartment or a house, you not only take over the assets, but also the responsibility for the liabilities or debts of the testator.
When settling the inheritance, you should determine whether the estate and, in particular, the property, is over-indebted or of value. Existing encumbrances, mortgages, or other easements can be found in the land register, which you as the heir have the right to inspect.
If the inheritance is over-indebted, i.e., the liabilities exceed the assets, you should not accept the legacy.
That also applies if the inherited estate, i.e., the home, requires renovation or is encumbered with existing burdens such as land charges and mortgages.
The apartment is worthless if the renovation effort or the repayment of liabilities is so high that the energy is not worthwhile for you in the end.
In this case, the inheritance must be made in writing and certified by a notary before it is presented to the probate court. It would help if you disposed of the heritage in due time, as the disposition deadline cannot be extended.
The disclaimer period is six weeks and begins when you become aware of the inheritance and are informed that you are the heir. In the end, however, the decisive factor is what you intend to do with the inherited property.
However, you may be able to contest the declaration if you regret accepting or rejecting the inheritance. That also applies if you have missed the end of the deferment period.
However, if you have inherited the house or apartment from your parents, memories, and emotions may still be tied to the inheritance. Or the testators expressed the last wish that the property should remain in family ownership, in which case a different starting situation naturally applies. However, if the property is not burdened with debts and you may have plans with the inherited estate, you can accept the inheritance without hesitation.
Use the inherited house yourself?
If you have now accepted the inheritance, the land register has been corrected, and you are currently considering how to proceed with the property.
You have the option of using it yourself, for example. Because the emotional attachment to the parents’ or grandparents’ apartment and the desire to save on rent payments and the high inheritance tax often speak in favor of self-use.
But before you move into the apartment you have been bequeathed, and you should check whether this option is the best for you.
Ask yourself the following questions in advance:
- Does the apartment, size, and location fit my current private and professional situation, or do I have to make too many compromises?
- Can I bear the costs of the move at the current time?
- Does the home have to be renovated before I move in, and can I afford the renovation costs?
- Can I bear the maintenance costs in the long term?
- Can I pay out any co-heirs, and do they even agree to my moving into the house we have inherited?
- Is it worthwhile to (continue to) rent or sell the house instead of using it myself?
Rent out the inherited house?
Besides the option to move into the property yourself, you also have the possibility to rent it out.
But before you consider this option, you should also consider the following aspects.
It is worth renting out the house if:
- You are not dependent on the proceeds of the sale
- The current rental payments, which cover operating and administrative costs and also bring you a higher return than comparable capital investments
- You are confident that you will be able to take care of the home and its maintenance in the long term and deal with tenants, expense accounts, and the tax office.
Sell an inherited house?
If you have inherited an apartment that became vacant after the death of the testator and is not rented out, it is usually worth selling the property rather than renting it out, provided you agree with your fellow heirs. In this way, you do not have to deal with possible modernization measures that would be necessary to be able to let the property.
Furthermore, you can usually achieve much more by selling a vacant apartment than by selling rented properties. The reason for this is that the demand for vacant apartments is higher than for investment properties.
Rented flats are usually only interesting for capital investors, as the high risk of litigation in the event of termination of the rental agreement due to personal use discourages many buyers from buying rented flats