Good morning,
I’m new here :-)
I hope I have chosen the right category.
I’m not very familiar with this and have a specific question—I hope someone can answer it.
Here’s the situation:
My boyfriend (27)
His brother (24)
Their parents (around mid-50s)
The brother already has a building plot next to the parents’ property. At that time, my boyfriend and I were not asked. It wasn’t possible either, since he finished his training late and simply didn’t have money for a building plot.
The parents want us to move into the house at some point. For me, that’s unthinkable and absolutely out of the question. My boyfriend accepts this.
There has been talk several times about transferring the house ownership. Does that even make sense if you never want to live there yourself? When the parents pass away, won’t all the taxes and fees become due eventually?
Or am I misunderstanding something?
We wouldn’t have to pay out the brother; the parents would cover that.
By the way: we’re not married yet, but plan to be eventually.
Best regards,
Steinbock123
I’m new here :-)
I hope I have chosen the right category.
I’m not very familiar with this and have a specific question—I hope someone can answer it.
Here’s the situation:
My boyfriend (27)
His brother (24)
Their parents (around mid-50s)
The brother already has a building plot next to the parents’ property. At that time, my boyfriend and I were not asked. It wasn’t possible either, since he finished his training late and simply didn’t have money for a building plot.
The parents want us to move into the house at some point. For me, that’s unthinkable and absolutely out of the question. My boyfriend accepts this.
There has been talk several times about transferring the house ownership. Does that even make sense if you never want to live there yourself? When the parents pass away, won’t all the taxes and fees become due eventually?
Or am I misunderstanding something?
We wouldn’t have to pay out the brother; the parents would cover that.
By the way: we’re not married yet, but plan to be eventually.
Best regards,
Steinbock123
First, it should be clarified who will cover maintenance and other ongoing costs. Ideally, the parents will live for a very long time, but (less ideally) the heating system or the roof may need replacing during that period. At least briefly, it is also worth considering whether there might be a loss of eligibility for government support programs (e.g., child benefit for homebuyers) because you already own a property, or whether your partner (hopefully not the case) might be forced to sell the house at some point. If the latter situation is secured with a right of residence, I would also recommend clarifying in advance which rights and obligations should be established upon transfer.
Inheritance/gift tax generally applies, as far as I know, to transfers from parents to children starting at 400,000€ (the 500,000€ exemption applies between spouses). So, if it can’t be divided in some way, the tax would also apply to the intended gift now.
The main advantage of gifting instead of inheriting is usually the “protection” of the assets. With each passing year, 10% of the gifted amount becomes protected from third-party claims (usually the state in case of long-term care), until after 10 years there is no possibility of reversal at all.
The main advantage of gifting instead of inheriting is usually the “protection” of the assets. With each passing year, 10% of the gifted amount becomes protected from third-party claims (usually the state in case of long-term care), until after 10 years there is no possibility of reversal at all.
That’s not correct. The tax exemption amount is only €500,000 for life partners and spouses, €400,000 for inheriting children, and just €20,000 for everyone else.
The original poster lives in Bavaria, where the value of a standard single-family home with sufficient land easily exceeds €400,000, so I think it’s very sensible for the parents to start considering this now. Whether or not anyone plans to live in the house afterward doesn’t matter. You can save a significant amount of money, because upon the parents’ passing, each child will inherit a portion and, if the amount exceeds the exemption, will have to pay taxes. The tax authorities and inheritance law do not care whether you want to move in or not.
What I don’t understand: did the brother receive the building plot as a gift from the parents, or why isn’t he included in the considerations? Has it been formally documented that, if so, the building plot is part of his inheritance? Otherwise, even if the parents prefer to transfer the house to someone who will actually live there, he still has a right to a compulsory share.
I assume you get along well with the brother and everything has been agreed upon to everyone’s satisfaction. In that case, I would DEFINITELY recommend transferring the ownership now. In the event of death, statutory rules apply unless a different arrangement is legally documented and notarized (will). Notarization is important here because simply written wills kept privately in a drawer can easily be contested or suddenly lost. I wouldn’t rely on that.
Now the parents can influence how much and to whom they transfer ownership, and potentially split the gift into two parts (I consider it reasonable for people in their mid-50s to wait another 10 years) to avoid inheritance tax and possibly inheritance disputes.
Whether or not you decide to move in is completely irrelevant to all of this.
What I honestly don’t understand is what your stake in this is. As a testator, I would definitely only leave assets to my children, not to (potential) in-laws. More than 50% of marriages end in divorce, and then the ex-wife and ex-daughter-in-law would suddenly own part of the house. That would be a complete no-go for me. Aside from that, your exemption in this case would only be €20,000—well, maybe enough for the garage...
The original poster lives in Bavaria, where the value of a standard single-family home with sufficient land easily exceeds €400,000, so I think it’s very sensible for the parents to start considering this now. Whether or not anyone plans to live in the house afterward doesn’t matter. You can save a significant amount of money, because upon the parents’ passing, each child will inherit a portion and, if the amount exceeds the exemption, will have to pay taxes. The tax authorities and inheritance law do not care whether you want to move in or not.
What I don’t understand: did the brother receive the building plot as a gift from the parents, or why isn’t he included in the considerations? Has it been formally documented that, if so, the building plot is part of his inheritance? Otherwise, even if the parents prefer to transfer the house to someone who will actually live there, he still has a right to a compulsory share.
I assume you get along well with the brother and everything has been agreed upon to everyone’s satisfaction. In that case, I would DEFINITELY recommend transferring the ownership now. In the event of death, statutory rules apply unless a different arrangement is legally documented and notarized (will). Notarization is important here because simply written wills kept privately in a drawer can easily be contested or suddenly lost. I wouldn’t rely on that.
Now the parents can influence how much and to whom they transfer ownership, and potentially split the gift into two parts (I consider it reasonable for people in their mid-50s to wait another 10 years) to avoid inheritance tax and possibly inheritance disputes.
Whether or not you decide to move in is completely irrelevant to all of this.
What I honestly don’t understand is what your stake in this is. As a testator, I would definitely only leave assets to my children, not to (potential) in-laws. More than 50% of marriages end in divorce, and then the ex-wife and ex-daughter-in-law would suddenly own part of the house. That would be a complete no-go for me. Aside from that, your exemption in this case would only be €20,000—well, maybe enough for the garage...
And precisely because of concerns like those from Nordlys regarding inheritance to the "daughter-in-law," I would at least clarify this topic with your partner.
Nordlys, you and your wife have already purchased the property together, right? Because in theory, she could leave you tomorrow, and then half would belong to her. Unthinkable, really. ;-)
Nordlys, you and your wife have already purchased the property together, right? Because in theory, she could leave you tomorrow, and then half would belong to her. Unthinkable, really. ;-)