Everyone who acquires something from an inheritance, either as heir, legatee, beneficiary of the compulsory portion or beneficiary under conditions, is subject to tax liability according to the provisions of the inheritance tax and gift tax act. The tax liability arises with the death, of which the tax office usually learns very soon. Probate courts and other authorities, but also banks and savings banks are obliged to report to the tax office as soon as they become aware of a death.The amount of the tax to be paid is generally determined by the value of the inheritance and the fact that the beneficiary belongs to one of three tax categories defined by law. In addition, the amount of certain tax allowances must always be taken into account for tax reduction purposes. Due to favourable tax rates and high tax allowances, this means that the closer the relationship to the testator is, the less tax you have to pay. Spouses have an allowance of EUR 500,000 and a pension allowance of EUR 256,000, children up to EUR 400,000 and grandchildren up to EUR 200,000.
The Family Home
Now the inheritance of the family home to the spouse or registered partner remains tax-free, the owner-occupied residential property is not included in the basis of assessment. The size and value of the property are irrelevant. Also, the inheritance at children or children of deceased children is tax-free, however limited up to a floor space of 200 square meters. However, the prerequisite is that the purchaser continues to use the property 10 years after acquisition for residential purposes. Leasing or sale lead to a subsequent burden with inheritance tax, unless there are compelling reasons for the abandonment such as death or significant need for care.