ᐅ Moving in before transfer of ownership / usufruct / rental agreement – disadvantages?

Hello everyone,

I am completely new here and also new to the topic of homeownership and property, and I feel a bit like I’m in a vast, bottomless pit.

I would like to ask a first question here for orientation and try to keep it as brief but precise as possible. Thank you.

So:

• An apartment was purchased by the parents and has remained empty ever since, but it would basically be move-in ready immediately (more or less, there is a functioning bathroom and an old kitchen with old but working appliances).
• The apartment is therefore empty and unoccupied, never lived in by the parents, and never rented out.
• The apartment is supposed to be gifted to the child within the next three months, at the latest by June of the current year.
• The child (the recipient of the gift and thus the future owner) wants and is allowed/able to move into the apartment as a tenant.
• The rental agreement between the parents (the usufruct grantors) and the child (the future owner but also tenant) is planned to be signed only on the day/date of the gift transfer.

The question:
Is it allowed (I think yes), but is it somehow disadvantageous if the child already moves into the apartment now, i.e., before the gift transfer and rental agreement, and lives there rent-free for three months?

Are there any disadvantages regarding the tax authorities, the gift, the property valuation for the gift contract, or anything else? Or does it not matter at all?

Thank you very much!

Good luck

Since editing is no longer possible ...

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For the sake of completeness, point 3 should also state that

a usufructuary right in favor of the parents (= the donors) is to be established,

otherwise the context might not be entirely clear.

Frischluft schrieb:

Is it allowed (I think yes),

The parents can do (almost) anything they want with their apartment.

Frischluft schrieb:

But is it in any way disadvantageous if the child moves into the apartment now, that is, even before the gift/lease contract is signed, and lives there rent-free for three months?

I can’t think of any disadvantage offhand. The apartment with the usufruct right is practically worthless anyway, as it can’t be sold.

Frischluft schrieb:

Does this have any drawbacks regarding the tax office, the gift, the property valuation for the gift contract, or anything else? Or is it completely irrelevant?

Completely irrelevant.

Thank you for your assessment.

If the parents hold the usufruct, the child lives in the property and wants to renovate, there can be issues with the bank … and possibly also with the tax authorities if you want to deduct the renovation costs.

So please carefully review exactly how you want to arrange things and what consequences this may have.

Hello.

Thank you for your response as well!

Why do you think there are problems with the bank and the tax office?

" ... if you want to deduct the renovation costs."

Who do you mean by you? The child or the parents? The parents should be able to deduct if they renovate as usufructuary rights holders, right?

Regarding your further question or the note about what should be arranged or is planned with the model:
The child wants and is actually supposed to live temporarily (about 1 year) in the gifted apartment and then presumably move out again, because they will take up a job in another city. At the same time, the parents want to use the apartment themselves during that period due to their age (this has long been the plan for their retirement). So a situation that suits both of them, including the timing.

Thanks again for the quick responses and the pleasant tone here.

🙂