What to do if the inherited property becomes too expensive?

Inheriting a property is often not easy. Disputes frequently arise, especially when there are multiple heirs. Furthermore, inheriting property often presents a financial challenge, and heirs frequently find themselves trapped in debt.

If the inheritance tax is too high, many heirs are often left with no option but to sell the property. If spouses or children use the property themselves for at least ten years after the inheritance, they are exempt from inheritance tax. Furthermore, allowances apply to spouses, children, and other close relatives such as grandchildren or siblings. However, the closer the degree of kinship to the deceased, the higher the inheritance tax becomes.

An example

Nieces and nephews have a tax-free allowance of €20,000 when inheriting property. If they inherit a property worth €200,000 from an uncle or aunt, €180,000 is subject to tax. In tax bracket 2, to which nieces and nephews belong, the tax rate is 25 percent. Therefore, on a property valued at €180,000, €45,000 in taxes must be paid.

The communities of heirs

If you don't inherit everything alone, you must pay out your co-heirs. How much each heir is entitled to depends on the value of the property. To find out how much the property is worth, it's advisable to have it appraised by a real estate expert, such as a reputable real estate agent.

The burdens

Taxes aren't the only burden that can fall on an inherited property. There may also be a mortgage on the property. Whoever inherits a property also inherits any outstanding debts to the bank. These debts are then distributed among all heirs, thus influencing how much each heir must pay out.

A consultation

What should happen to an inherited property needs careful consideration. Heirs often underestimate what they're getting into. Therefore, heirs should seek advice from a real estate professional. A real estate agent, as a neutral third party, can also mediate between heirs who are in disagreement.

Are you unsure what the best solution is for your inherited property? Contact us! We'd be happy to advise you and work with you to find a solution.

Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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