Anyone who inherits a property must always pay inheritance tax – unless the heir moves in promptly himself. Delays will only be accepted in exceptional cases.
If real estate is inherited in the family, inheritance tax is not always due. “The prerequisite for the tax exemption is that the inherited apartment or house must be used immediately and lived in for ten years,” says Daniela Karbe-Gessler from the Taxpayers’ Association. Heirs usually have six months to move in.
In a specific case (Az. II R 6/21), the Federal Fiscal Court (BFH) has continued its previous case law: A late move-in due to clearance and renovation work can be lawful. The move-in of a sole heiress to a two-family house had been delayed by a whole year due to the lack of tradespeople. The competent tax office then revoked the inheritance tax exemption and assessed the tax. The BFH overturned the verdict.
It is true that heirs to a family home would have to carry out renovation work as quickly as their personal means allow. However, it is not their fault if they commission the renovation work immediately but the commissioned craftsmen cannot carry it out in time for reasons for which the heirs cannot do anything. This includes, for example, a high order situation.
“Timely clearing out and the commissioning of craftsmen can be an indication of the intention of self-use,” says Daniela Karbe-Gessler. However, anyone who recognizes at the time of commissioning that the craftsman is not in a position to carry out or start the renovation work before the end of six months should be able to prove that they have also asked other craft businesses.
By the way: In principle, individual allowances apply to close relatives when it comes to inheritance. If you move into a property you inherited from your family, you can still use this allowance for further donations. Anyone who does not move into the inherited property must pay tax on the value of the property in excess of the individual allowance.
