Transfer of property to children

If he uses the property himself and it would be, for example, 600Ts, would he then not have to pay tax on the 200?

If he inherits and lives in it himself, he does not have to pay tax at all. Even if the house is worth €5 million (maximum 200 sqm living space - otherwise taxes apply to the exceeding area). Owner occupation then required for 10 years.

In summary, it is probably best to gift the property completely.
Due to the right of residence and the resulting decrease in value, the tax exemption amount of 400Ts could possibly be undercut.

Yep. (Or usufruct). But I would formally sell it, since a gift could be "reversed" in the case of long-term care (simplified speaking).

Are the notary fees fixed according to a fee schedule or freely negotiable?

They are fixed.

Does the value reduction due to the right of residence also apply here? Because the value is supposedly the basis for the fee?

Either the house has a full value (without encumbrance like right of residence), or the contract consists of two values (reduced house value + corresponding value of the encumbrance).

Is there information about the residual value decreasing due to the restrictive right of residence (approx. in %)?

Monthly cold rent x remaining life expectancy, discounted to the present day.

We have given away rented apartments as gifts and retained the usufruct. As a result, our children have no costs, no obligations, and the rent remains for our retirement provision. Only when the last of us dies can they freely dispose of them. It has no disadvantages for anyone except notary costs and required no work except 2 notary visits. The usufruct significantly reduces the property values.
Addendum: the calculation of the usufruct by nordanney was exactly the same for us

Monthly cold rent x remaining life expectancy, discounted to today's date.

And the tax office accepted it so simplified? The formula for the usufruct that I know is:
Annual net income x remaining life expectancy (from table)
Annual net income is the gross income (i.e. net cold rent) minus operating costs (non-allocable ancillary costs, maintenance reserve, rental default risk).

With the right of residence, it is often the case that it expires after a certain "period of non-use." In standard contracts often 6 months. That means if the rights holder moves out (age-appropriate apartment, nursing home), the right expires. Theoretically, this could also be the day after tomorrow, which would then create a nice tax saving model.

Formula for the usufruct,

Usufruct is also different from the intended right of residence. That is true.

Thanks first of all, I will report back on how it went. One should think ahead in time to possibly make it a little easier for the next generation. They still have a lot to face anyway...... Even if criticism is not welcome here, it should still be noted that it is basically scandalous how politics has watched and allowed prices to skyrocket astronomically. Therefore, I dare to quote one of our "leading" politicians: "we stand for ensuring that in the future even an employee can afford a small house" o_O ... meanwhile he smiled again—I tactfully will not name him! Greetings to all who can smile along as well...... ;)

Even though criticism is not welcome here, it should still be noted
that it is scandalous how politics has watched and continues to watch how prices
have skyrocketed to astronomical levels.

To be honest, it is largely due to a) the increased land prices and b) the wishes of the builders. Where 100-120 sqm used to be standard, today it has to be more like 150-160 sqm (often even + X), and plots of 250 sqm are no longer enough for a semi-detached house, but rather detached on at least 600 sqm.

In fact, it is possible to get a reasonably priced little house with a garden. Prices of T€ 220-250 for the complete house with land are easily possible (especially if it does not necessarily have to be the capital cities or metropolises). Developer projects with "off-the-shelf" houses.

Besides that, politics has not only watched but even pushed the price spiral with dreadful subsidies. KfW and Baukindergeld are unnecessary instruments that have flowed at least 1:1 into the prices. In that regard, you are right that politics does not look good.