Hire purchase within the family (with ownership share?)

You probably misunderstood that. You are supposed to buy it from the community of heirs, but the money does not flow immediately; instead, it is in the form of a private loan that the heirs grant you. You then pay the heirs the installment that you intended as rent. How much repayment and how much interest, and consequently how long, would then be a matter of negotiation. But how that looks with taxes - no idea.

Then I actually misunderstood it. So it would really be something like an installment purchase. In that case, according to my understanding, you would have to reverse the whole thing and make an arrangement where the sellers keep shares of the property as long as we have not fully paid off the private loan. As far as I understand, there is no retention of title with real estate, right?

In this case, according to my understanding, you would have to reverse the whole thing and arrange a regulation where the sellers keep shares of the property as long as we have not fully paid off the private loan. To my knowledge, a retention of title does not exist for real estate, right?

No. What you are planning is not possible.

Do it the way wrote. The community of heirs then acts as a bank. It could also get a land charge for security in the land register (ranked after the real bank that finances the renovation). Everything else is rubbish.

No. What you are planning does not work.

Do it as written by . The community of heirs then acts as the bank. It could also get a land charge as security in the land register like a real bank (in ranking after the real bank that finances the renovation). Everything else is nonsense.

Especially if no interest or interest significantly below the market rate is agreed for the loan, the tax office could also interpret this as a gift, I thought.

Yes, that's why I would agree on interest rates specifying how high they must be so that just not, etc etc best to -> Steuerberater. It could be that in the end the founding of a foundation would even be the best option, which would then officially also take over the restructuring (I don't believe it, but it could be)...

Especially if no interest or interest significantly below the market level is agreed for the loan, the tax office could also interpret that as a gift, I thought.

There are two things to consider. 1. The market interest rate can still be set at 1.5-2% now, as it is actually market standard. Below market rate is also possible, as long as it stays within a reasonable range. 2. Only the interest counts as a gift, not the loan. Since the property – according to your words – needs renovation, I assume the loan is not particularly high. Let's say €200,000 for calculation purposes. If you pay only 1% interest and the market rate would be 2%, you are effectively gifted 1% interest each year. So in my example, €2,000 p.a. This amount is credited against the exemption limits for a gift. After 5 years, that is e.g. €10,000 gift. Every third party has an exemption limit of €20,000 every 10 years (?). Therefore, the issue is manageable.

Two things must be considered. 1. The market interest rate can still be set at 1.5-2% now, as it is actually market standard. Below market is also possible, as long as it remains reasonable. 2. Only the interest is considered a gift, not the loan. Since the house – according to your words – is worth renovating, I assume the loan is not particularly high. Let's say €200k for calculation purposes. If you pay only 1% interest and the market rate would be 2%, then you are gifted 1% interest every year. So, in my example, €2k per year. This amount is counted towards the gift tax exemptions. After 5 years, that would be, for example, €10k gift. Every third person has a tax exemption of €20k every 10 years (?). So, the issue is manageable.

That would indeed be manageable. I had read that there must be an agreement that would usually be made in this form with third parties; otherwise, it could happen that the entire loan amount and not just the interest could be treated as a gift. But I just got a great idea – I'll discuss this with a tax advisor! :p