Taking over the parental home in x years - Paying out siblings -

Hello everyone,

I have agreed with my parents and my sister that I will take over the family house in a few years (in 5-7 years). They will then move into an age-appropriate apartment. Currently, we are still discussing which is the fairest "method" for all parties. I will try to briefly outline the current situations.

Sister: Lives with her husband in the purchased house. Paying off a loan including special repayments. Parents: Paid-off house. Cash savings according to my mother roughly equal to the value of the house. Me: Renting with my wife. Approximately €180,000 saved, intended/was intended for a real estate purchase.

We have brainstormed some ideas:

1) I get the house in x years. Advanced inheritance and pay my sister out. Here was my idea to start paying out my sister now. She can pay off more of the loan annually and save quite a bit this way. But which value of the property do I base this on? Current value or the one in 5 years? Or a moving average?

2) I get the house in x years. Receive the house as advanced inheritance. Use my own money over the coming years to renovate parts, and this will be accounted for in the valuation in x years.

3) I buy the parents' house, they remain living there and pay "rent".

4) ?

Do you have any other ideas? The goal should be that it is divided as fairly as possible for all parties.

Best sunny greetings.

How about: You get the house transferred to you in x years and at the same time pay your sister to compensate for the unsanitary value, if necessary your parents give your sister some money to make the difference smaller. Then use the possibly necessary loan to also pay for the renovation.

But pay attention to inheritance tax, it might be advantageous if your parents already transfer x% of the house to you now and give your sister the corresponding money.

In my opinion, taking over the house now = gift/advanced inheritance. Market value as the valuation basis and the parents pay rent. You take out a loan and buy out the sister - then the interest on the loan is tax-deductible. Renovations are also deductible, by the way. Then everyone benefits from it.

One more completely different aspect: energy renovation obligations affect the new owner whether bought or inherited: the standard you have to catch up to could be stricter in the intended x years than today's benchmark ...
Moreover: fears of change / stubbornness in old age increase with age. I would not expect that the parents will back down from the moving plan. In seven years, one will postpone it again by another seven years; and when these fourteen years are up, Dad may not be doing so well and Mom might already see herself as a widow in the new environment soon after the move, and then the plan no longer applies. Especially through informal channels / within the family, in doubt, you only "have" what has already been carried out. Also whether the sister will still be married in seven years ... - in seven years, much can be rearranged that now may be considered a suitable basis for reliable agreements.

If everyone agrees, then I would also aim for the takeover now. One possibility is that you inherit half early and pay out your sister. The value should then be set based on the current status, and either your parents pay rent or the value is reduced accordingly.

Some things have already been mentioned that should be considered if you wait. Additionally, the 10-year period for the gift tax would start to run now. This only becomes relevant if your parents need state benefits (care, etc.), but if you get it done now, all the better.

So, if you are all sure about this option, I would proceed with it now. How to reasonably ensure that your parents can stay in the house for another 5-7 years, the notary will advise you on that.

Parents are selling the house now, buying an age-appropriate apartment, and each giving you half of what they want to give as a gift.

Inheriting the house now and paying out the sister based on the current value is unfair. If we calculate with a 4% annual price increase and 7 years, that would be almost 400k in 7 years from a current value of 300k.

Buying it out now and renting from the parents would certainly be possible. But it doesn’t sound 100% fair.

If everyone is serious, then finalize everything now. Otherwise, everything is at risk.

Next option: your parents spend most of the bank balance and sell the house if needed. They keep the money from it for their own care in order not to be a burden on the taxpayer as wealthy individuals.