Building on the parents' property

Hello,

I have just registered in the forum and would like to start with a fundamental question:

My wife's parents own a total of 3 adjacent plots in a residential/mixed-use area. One of them has their private residence, another houses their business - a restaurant. The third plot is undeveloped. They would now like to provide us with building land free of charge for our new single-family home. We would prefer a part of the plot where the restaurant is located. This, in turn, is privately owned by her mother and leased to the business.

The question now is what sensible alternatives exist to dividing the plot and the associated costs/time delays. In my opinion, this would not be particularly meaningful anyway, since my (only child) wife is supposed to be handed over the business along with the entire plot in a few years.

I would be very grateful for some tips.

Best regards, Tobias

I recommend consulting a tax advisor and a notary.

Make sure to have a part of the whole separated for you, which will be transferred to you. This can also be done through a gift, so you are on the safe side with the bank and the property will be counted as equity there.

Otherwise, there could be problems because you are building on someone else's land.

There could possibly be a spin-off of a business or business assets involved... before contracts are signed, I would definitely involve the in-laws' tax advisor. I do not know the value relations, contracts, and agreements in the present case... if usage rights are granted free of charge for a long period, gift tax aspects could possibly be involved. Currently, the in-laws would grant you an exemption amount of EUR 20,000 per donor, which can be quickly used up.

The transfer should first go to your wife, who, in this context, since you are married, can transfer 50/50 as marital gains to you by half. This way, you have killed two birds with one stone.

Hello Tobias,

We would prefer a partial area on the property of the restaurant.

Sure?

I would recommend spending some evenings or weekends at the restaurant; depending on the gastronomic concept, it is not so easy to be "alone"

The question now arises as to what sensible alternatives exist to dividing the property and the associated costs / delays ... I would be very grateful for some tips.

This forum has the great advantage that a tax advisor (Steuerberater) is among its members. So read *merlin’s* advice carefully and follow it before you fall flat on your face based on layman’s opinion.

Happy New Year!