Looking for an idea for a sustainable decision

With a plot width of 18 m, your calculation does not add up. Due to setback areas, a house will probably not be wider than about 12.5 m.

6x10 m for 60 sqm of living space results in a larger external dimension.

I think first the ownership/inheritance arrangements should be clarified, then one should discuss the possibilities of a new building with an architect. Preliminary discussions can certainly be held here, but a measured site plan with building specifications ([Geschossflächenzahl], [Grundflächenzahl], [Baufenster], number of floors, ridge heights, etc.) is absolutely necessary.

However, one should be aware that especially for a bungalow you have to calculate at least 2000 €/sqm living space. In addition, demolition costs, temporary housing costs, and redesigning the plot.

Who owns the property (in the sense of: who is listed in the land register) your house built there does not belong to you, but to the one listed in the land register. Who is the heir? How much do they inherit? Who else claims a right besides you? Do you really want to live there (both locally) and next to your mother-in-law? If I were you, I would leave it alone, wait until mother-in-law is dead or in a home, then sell and pay off the loan and the home with the money. Depending on how long the home stay is and where the property is, the money might already be gone.

I think first the ownership/inheritance situation should be clarified, then one should discuss the possibilities of a new building with an architect. Certainly, preliminary discussions can be held here, but a measured site plan with building specifications (floor area ratio, site occupancy index, building envelope, number of floors, ridge heights, etc.) is absolutely necessary.

If we should clarify that first now, I will take care of it.

Who owns the plot (in the sense of: who is listed in the land register)? Your house built there does not belong to you, but to whoever is listed in the land register. Who is the heir? How much do they inherit? Who besides you is making a claim? Do you really want to live there (both geographically) as well as next to your mother-in-law?

I (still) cannot answer the first questions, but the last one I can: Yes, that would be possible. But – and hence also the idea of two houses – a certain spatial distance (which does not have to be very large) would not be so bad.

I also need to ask again, who currently owns the property, just the mother-in-law? The bank has nothing to do with it, they only lead me to the second question: How much is the property worth?

In the case of inheritance: How many people (legally) have a share of the inheritance? Simply asked: How many children and grandchildren does the good lady have? Please also note that you will not inherit, but your spouse will. You will have to pay everyone out: value - debts

would then say, let it be. if you only put one euro in there, it can get ugly for you in case of inheritance disputes.

or you do something along the lines of "we live, we care, we inherit". but you have to want that, and the notary also has to write it that way in the will.

I still have to ask, who currently owns the property, only the mother-in-law? The bank has nothing to do with it, it just leads me to the second question: How much is the property worth?

The property value is currently unknown to me. If you exclude the bank, the property belongs only to the mother-in-law.

In the case of inheritance: How many people (legally) have a share of the inheritance? Simply put: How many children and grandchildren does the good lady have? Please also note that you will not inherit, but your spouse will. You will have to pay everyone out: Value - Debts

4 children and 2 grandchildren. We are aware that this is probably not easy to resolve and that there will be claims. But we also thought along these lines:

or you do something along the lines of "we live there, we care for her, we inherit". But you also have to want that, and the notary must also write it like that into the will.