Inherited real estate, what happens first?
Upon the death of the deceased, ownership of the property automatically passes to the heirs, without any separate transfer act. However, the land register must be corrected. As an heir, you are obliged to apply for this correction. The good news: within two years of the inheritance, the correction is free of charge.
⚠️ Without land register correction, you cannot sell or mortgage the house. Apply for the correction as early as possible!
What options do you have with the inherited house?
- Move in yourself, may be inheritance tax-free if used as primary residence
- Rent out, rental income is subject to income tax
- Sell, possible speculation tax if less than 10 years between acquisition and sale
What must you do immediately?
- Obtain a certificate of inheritance (or provide notarial will with opening protocol)
- Apply for land register correction, free within 2 years
- Review ongoing contracts (utilities, insurance, tenancy agreements)
- Enquire about mortgages and debts at the land registry
- Submit inheritance tax return within the deadline (3 months after knowledge)
Inheritance tax on real estate
Spouse: €500,000 | Children: €400,000 | Grandchildren: €200,000 | Siblings/others: €20,000
If the property value exceeds the tax-free allowance, inheritance tax of 7 to 50 percent applies depending on the tax class. The owner-occupied family home may be completely tax-exempt under certain conditions.
Frequently asked questions
Do I need a certificate of inheritance to update the land register?
Not necessarily. A notarial will together with the probate court's opening record is usually sufficient. A handwritten will generally is not.
What does updating the land register cost?
Nothing, if the application is filed within two years of the death. After that, fees are based on the value of the property.
What are the inheritance tax allowances?
Under § 16 ErbStG: 500,000 euros for spouses and civil partners, 400,000 for children, usually 200,000 for grandchildren and only 20,000 for siblings, nieces and nephews.
Will I pay tax when selling?
That depends on when the deceased acquired the property, not on when you inherited. If more than ten years have passed since their purchase, no private disposal gain arises under § 23 EStG.