You have lost an acquaintance or even someone important to you. Not a pleasant situation. But besides the loss, there is also a lot to be arranged. The death of a loved one always involves inheritance. And any inheritance involves property and may involve inheriting a house or a flat.
With an inheritance, all sorts of questions arise and those affected are often overwhelmed. What needs to be arranged now, what administrative procedures are there and, above all, what costs are incurred now?
You will find the answers to these questions in this article.
Inherited house or flat? – Here’s what you need to consider
Anyone inheriting a house should first find out about the status of the property. Is the property in debt or are there any mortgages on the building or flat you have inherited? If you answered yes to this question, it is better to reject the inheritance to avoid putting yourself in too much debt. However, if it is emotionally valuable family property, you should prepare a financial plan and see if you can finance the inheritance.
If you want to keep the inheritance you have inherited, you need to decide on the following question: how should the house or flat be used? You can live in the property yourself, rent it out or sell it altogether.
Regardless of what you choose, an important task is also correcting the land registry so that you can be registered as the owner and be authorised to make further decisions.
If there are other people involved in the inheritance, such as siblings or a community of heirs, be sure to discuss how to proceed with them.
What to do with the belongings from the inherited house?
Regardless of which of the three alternatives – rent out, use or sell – you have chosen you also decide what to do with the contents of the inherited property. Whether it is furniture or personal belongings of the deceased these things need to be removed from the house or flat if they are going to be used further. Unfortunately, hardly anyone has that much free storage space and most things are too nice to throw away immediately.
We offer the solution to this problem! At Boxie24, you can rent storage space to store heirloom furniture, for example, to create space for further use of the heirloom. We know that you need to be focused on many different tasks when dealing with an inheritance, so renting a warehouse is made as easy as possible.
Conveniently, we collect the items from the inherited house or flat. You don’t have to do anything else and can concentrate on the more important tasks.
Cheap: thanks to our innovative concept, we always offer you the cheapest price when renting storage space.
Simple: simply book your self storage box in our modern warehouse online or call us. It only takes a few minutes.
Flexible: with us, you do not pay a high deposit or have to give long notice. You can store and retrieve at any time. Call us!
Safe: Even if the inherited furniture has a high emotional or financial value, your possessions are safe at all times in our state-of-the-art warehouses, which are monitored 24 hours a day.
Selling, renting or using inherited property yourself?
After picking up your belongings at the property, you better think about how you want to use it. Especially in the case of a community of heirs, it makes sense to seek tax and/or legal advice. To determine the financial impact of a sale, you can also hire a local estate agent who can estimate the market value of the inherited property before it is sold.
Basically, the heirs have three options for further action:
- Self-occupancy: Deciding to live in the property yourself provides high tax benefits, especially for spouses or children. For example, spouses are exempt from inheritance tax if they have subsequently lived in the property for 10 years. This also applies to children if the living area does not exceed 200 square metres.
- Selling an inherited house: A big advantage of selling is that the purchase price gives you quick liquidity and can cover any expenses quickly. If the property is rented out at the time you take over, you should think carefully about whether you prefer to sell or rent it out. The solvency of the tenants and the need for renovation play a particularly important role in the decision.
- Renting out the property: If selling and using is not an option, the property can also be rented out. Rental income is then subject to income tax as rental and leasing income. If the inherited property is already rented out, as an heir you automatically become the legal successor of the deceased and take over all rental agreements. If so, contact the property manager to find out the current status of the house.
- Establishing home ownership: if a community of heirs is involved, there is also a fourth option to use the property – you and the other heirs can establish home ownership. The house is divided into several flats with different owners. However, this requires a certificate of completion, i.e. the flats must be independent units that allow independent use. A certificate of division is also required, which splits the property into condominium and community properties.
Inherited house: what costs do you have to deal with now
There is no general answer to the exact costs you will face if you have inherited a flat or received a house. However, essentially two aspects have an impact.
- Situation of the property: is the property paid off or is there still a debt on it? If so, the loans are taken over as an heir for repayment.
- Inheritance tax: inheritance tax always depends on the relationship between the heir and the deceased. Direct family members, such as children or spouses, fall under tax class 1, indirect family members, such as parents or grandparents, fall under tax class 2 and all other persons fall under tax class 3. The family relationship also has an impact on the tax exemption. Direct family members get the highest tax deduction. This is up to 500,000 euros for life partners. Anything outside the tax deduction is taxed at a flat rate. The tax rate itself depends on the tax bracket and the amount of the inheritance. The higher the tax bracket and the higher the inheritance, the higher the tax rate. For example, in tax bracket 3, this can be as high as 50%. With real estate, estimating the amount of inheritance is always slightly more difficult. The market value must first be estimated by the probate court. The amount of inheritance tax cannot be decided in advance.