Heritable building right / Heritable building lease / Ground rent

Hello everyone,

Is it true that the ground lease interest on a leasehold property can be determined by the lessor themselves? Can this interest theoretically be as low as 0.5% or less for a property value of €150,000 and a term of 99 years?

Is it true that the ground rent interest on a leasehold property can be determined by the lessor himself? Could this interest theoretically also be only 0.5% or less with a property value of €150,000 and a term of 99 years?

Yes (Who else but the one who leases out his property should determine the rent?)

However, it can trigger gift tax. (I think under 1%?)

However, it can trigger gift tax. (I believe if under 1%?)

Source?

So far, I have only understood that if I were to inherit the property, my child would have to pay gift tax.

Whenever you receive something below value, it is a mixed gift. Even when you receive a [Erbbaurecht] below value, it is a mixed gift. The extreme case is 0€. Therefore, gift tax must also be paid.

Whenever you receive something below its value, it is a mixed gift.
Even if you receive a hereditary building right below its value, it is a mixed gift.

So do most hereditary building right holders pay gift tax on properties from church parishes for their hereditary building rights? There, the property is generally leased below value.

Now an example from practice: I own a condominium under hereditary building rights. Property according to standard land value (conversion factors due to significantly increased land utilization disregarded) approx. €420,000. The hereditary ground rent for the entire property (not my share for the apartment!!!) is €1,930 annually. That does not even correspond to a return of 0.50%. I have not paid gift tax for years.