Transferring family home tax-free

In tax-optimized succession planning for families, it is often important to make optimum use of tax allowances.

It is particularly interesting when assets can be transferred tax-free. Section 13 para. 1 no. 4a ErbStG offers just such an opportunity: According to this, under certain circumstances, the transfer of real estate can be completely free of inheritance and gift tax.

The prerequisite is that it is a so-called "family home". This means that it is real estate in which a "dwelling is used for personal residential purposes". In such a case, a person can transfer ownership of the property to their spouse tax-free. It does not matter how large the property is or what its value is. The same applies if one spouse assumes (financial) obligations of the other in connection with the purchase of the family home.

The transfer of the family home between spouses is also exempt from inheritance tax in the event of death (Section 13 para. 1 no. 4b ErbStG). However, the conditions are stricter in this case, as the surviving spouse must continue to live in the property for a further 10 years after the death of their spouse. If, on the other hand, he or she moves out before then, the tax privileges no longer apply.

While the lifetime transfer of the family home can only be made free of gift tax between spouses, the transfer of the family home to children can also be tax-free in the event of death. In this case, however, the living space is limited to 200 square meters (Section 13 (1) No. 4c ErbStG).