How can I transfer my property to my children in a tax-efficient manner?
October 4, 2022 | 50,00 EUR | answered by Mia Pilz
Dear tax advisor,
My name is Renata Kaiser and I am the owner of a property that I would like to transfer to my children in a tax-efficient manner. The property is a multi-family house that I acquired many years ago and has since experienced a significant increase in value. My children are already adults and have shown great interest in taking over the property in the future.
My main concern is that I am not sure how to transfer the property in a tax-efficient way. I am afraid that high tax burdens could arise and therefore would like to examine all possible solutions and options in advance. It is important to me that my children can take over the property without any financial burdens and that everything is handled correctly from a tax perspective.
Could you please explain to me in detail what options there are to transfer the property to my children in a tax-efficient way? Are there any special tax regulations or exemptions that we can take advantage of? What steps do we need to consider to carry out the transfer smoothly and tax-optimized? I would be very grateful for your expert advice and support in this matter.
Thank you in advance.
Best regards,
Renata Kaiser
Dear Mrs. Kaiser,
Thank you for your inquiry regarding the tax-efficient transfer of your property to your children. It is understandable that you are concerned about possible tax burdens and want to ensure that the transfer proceeds smoothly and tax-optimized. I am happy to explain to you the various options and steps you should consider.
First and foremost, it is important to know that the transfer of a property is generally subject to taxation. In this regard, gift and inheritance taxes play a role. However, there are certain tax-free allowances that you can take advantage of to reduce the tax burden. For children, the tax-free allowance for gifts, for example, is 400,000 euros every 10 years. Furthermore, there are also regional differences and additional allowances that apply depending on the federal state.
One option for transferring the property tax-efficiently is to do so gradually over a longer period of time. This way, you can optimize the tax-free allowances and minimize the tax burden. There is also the option of transferring the property through a gift, which also has tax-free allowances. It is important that the gift is notarized to be legally valid.
Another option is to transfer the property with a usufruct. In this case, as the donor, you retain the right to continue using the property and thus receive a lifelong right of residence. There are also tax benefits in this case, as the value of the usufruct can be deducted from the gift tax.
It is advisable to consult with a tax advisor in a personal consultation to inform yourself about your individual situation and work together to find the best solution. This way, you can ensure that the transfer is tax-optimized and legally correct.
I hope that this information is helpful to you and I am available for any further questions. Thank you for your trust and I wish you success in transferring your property to your children.
Best regards,
Mia Pilz
