Taking possession before gift / usufruct / renting - disadvantages?

For a rented apartment, the usufruct value can be determined based on the cold rent. If the apartment is now rented out very cheaply to one's own child, the usufruct value will initially be lower. For the gift tax, the usufruct value is deducted from the apartment value during the gift. With a low usufruct value, a high gift value remains. If this exceeds €400,000, gift tax would be payable (apartment value - usufruct value > €400,000 = gift tax). In this case, it would need to be explained to the tax office that the current cold rent is not market-based and therefore a hypothetical market rent must be used for the usufruct value calculation. However, if the market value of the apartment is not significantly above €400,000, there is no problem.

I can’t imagine any disadvantage ad hoc. The apartment with the usufruct is practically worth nothing anyway, as it is not sellable.

That depends a lot on the location. Especially with high standard land values. I recently had a calculation example where an apartment with a market value of €400,000 still had a gift value of €240,000, even though the donor (holder of the usufruct) is only 40 years old (big city with a standard land value in the location of the apartment of €1200/m2).

Phew.

I understand that gift tax is to be paid/would be paid if the gift value is over €400k. The rest of the explanations are not quite clear to me.

We just want to be sure and reassured at first whether the child can live in the apartment cost-free for 1-2 months before all the formalities (May/June) and officially register with the municipality, so really just move in already. Or whether this might have any consequences/effects/disadvantages later on that we are not aware of.

Regards

That depends a lot on the location. Especially with high standard land values. I recently had a calculation example where an apartment with a market value of €400K still had a gift value of €240K, even though the donor (holder of the usufruct) is only 40 years old (big city with a land value in the location of the apartment of €1200/m2).

Let's see if I understood it:

By "even though" you mean that the long remaining lifetime of the donor should actually result in a high usufruct value and thus a low remaining gift value, right?

And this, in your example, is not the case due to a "high land value."

Correct?

For a rented apartment, the usufruct value can be determined based on the cold rent.
If the apartment is now rented very cheaply to one's own child, the usufruct value is initially lower. For the gift tax, the usufruct value is deducted from the apartment value at the time of the gift. With a low usufruct value, a high gift value remains. ...
...

But the apt. is not rented at all. Not yet. Wouldn't the usufruct be determined differently in our case? Based on the value of the apt.? As I said, it is only to be rented after the gift, in 1-2 or 3 months. Not before.

Let's see if I understood it:

By "although" you mean that the long remaining lifetime of the donor should actually result in a high usufruct value and thus a low remaining gift value, right?

And this is not the case in your example because of a "high land value."

Correct?

Yes, basically.

But the apartment isn't rented out yet. Not yet. Is the usufruct calculated differently in our case? Based on the value of the apartment? As mentioned, it is supposed to be rented out only after the gift, in 1-2 or 3 months. Not before.

No, never based on the value of the apartment.
Either based on the saved rent in case of self-use, where a comparative rent from surrounding apartments is used, or based on the actual rent if the apartment is rented out.