Gift of a house with some question marks

Hello everyone,

since I am the only heir, my mother would like to transfer her house to me now by gift. The house is debt-free, but the conditions are a bit unusual.

There are actually two plots of land, one of which has the mentioned two-family house built in 1960. Directly adjacent is a second plot of land, which should also be transferred. This is currently development land, so it basically has no higher value because nothing can be built there yet. However, the municipality assesses a standard land value of 410 euros per square meter for this plot. If you actually used this standard land value as a calculation basis, you would arrive at a land value of 246,000 euros for 600 sqm.

Of course, I would now like to stay under a total value of 400,000 euros to avoid paying gift tax. But this would only work if the second plot does not have to be declared with the standard land value. Otherwise, the total value would certainly be between 600,000 and 700,000 euros.

Can you tell me if the standard land value must be the basis here? As mentioned, I am currently not allowed to build anything there at all.

How high do I generally have to state the value of the property? Will this be questioned by the notary? As already mentioned, the house is quite old and apart from occasional new bathrooms/kitchens and new floors, nothing major has ever been done. The roof and heating will certainly need work again soon and there is no insulation either. The land is a bit larger than the second one, but I would quite reasonably approach this with about 400,000 euros; some renovation is definitely needed.

Do you have any opinions or tips regarding this situation?

I am grateful for any advice!

Best regards, Timmi

Plot 1 and house now, plot 2 later. I don’t see the problem?

A registered usufruct right can, in some cases, also significantly reduce the value.

But it sounds like a case for the tax advisor.

The municipality nevertheless estimates a standard land value of 410 euros per square meter for this plot. If you actually used this standard land value as the basis for calculation, you would arrive at a land value of 246,000 euros for 600 sqm. [...] Can you tell me here whether the standard land value has to be the basis?

I don’t know if would like to say anything on this. You are not buying the land from the municipality, after all, but it belongs to your mother and she wants to gift it to you. For the tax office, other criteria are decisive for the valuation of real estate than assuming the hypothetical market purchase price (this may be different for the notary fees themselves). For tax purposes, it might be smarter if the mother gifts it to you in several installments (if she can still gift multiple times). Technically, the earlier each year you own the house is good, because energetic modernization obligations after ownership transfers are likely to become stricter in the future. Are you even the sole heir entitled to inherit (which are not necessarily only descendants)?

Can you tell me here if the standard land value has to be the basis?

The probability approaches 100%.

Plot 1 and house now, plot 2 later. I don't see the problem?

€400,000 within 10 years. So house today and hope that the mother lives another 10 years before another gift can be made (tax-free)?

A registered usufruct right can possibly also (significantly) reduce the value. But sounds like a case for the tax advisor.

Yep. Can reduce the value to €0 if necessary. Then for the bank, if you need money for a new roof, for example, it is also only worth €0 and cannot be used as collateral.

The probability is approaching 100%.

[*]That is probably not correct. There are different ways to assess a property, especially through an appraiser.
[*]The value of the house is likely approaching zero (due to the renovation backlog); here too, an appraiser can help.
[*]The proposal with the usufruct is correct anyway; it not only reduces the value of the property but also properly protects your mother.
[*]You should definitely discuss this with a tax advisor and a lawyer. I expect that you will not have to pay a cent in gift tax.