An inherited property is rarely just a matter of money. There's often a family home attached to it, childhood memories, sometimes old conflicts between siblings. At the same time, time is pressing: updating the Grundbuch (land register), Erbschaftsteuer (inheritance tax), perhaps a vacant house that keeps generating costs. The question of whether to keep, rent, or sell an inherited property can't be answered in general terms. But it can be approached systematically – and doing so is worth it.
First get an overview, then decide
Before even considering whether to keep or sell, you need clarity about the legal and financial starting point. How is the property encumbered – is there still an outstanding Grundschuld (land charge)? What condition is it in, when was it last renovated? And crucially: who actually inherits, and in what proportions?
When several people inherit: the Erbengemeinschaft (community of heirs)
As soon as more than one person inherits, an Erbengemeinschaft (community of heirs) automatically forms. This means all heirs jointly own the property, and no one can dispose of it alone. Selling, renting, major maintenance work – all of this generally requires the consent of everyone involved. In practice, this is often exactly where things get stuck. One heir wants to sell, another wants to keep the house, a third needs money quickly. Without agreement, the only option left may be a Teilungsversteigerung (partition auction), which is usually the worst solution for everyone, since the property is often sold below value. Talking to each other early on and getting professional advice can save a lot of trouble. An independent consultation can also help to bring objectivity to the different interests within the community of heirs.
Keep, rent, or sell – comparing the options
Once the legal side is settled, it's time for the real question. There are essentially three paths, each with its own logic.
Move in yourself or keep it as a reserve
Some heirs decide to move into the inherited property themselves, whether out of emotional attachment or simply because the location suits them. This works well if the property fits your own living situation and there's no major renovation looming that you'd rather avoid. Anyone who wants to keep the property purely as an investment without using it should calculate honestly: maintenance, Grundsteuer (property tax), possibly Hausgeld (monthly service charge) for a condominium – all of this continues even if no one lives there.
Renting out as a source of ongoing income
At first glance, renting sounds like the most comfortable solution: monthly rental income, while the asset itself is preserved. In reality, though, it also means responsibility – finding tenants, maintenance, and, in case of doubt, trouble with rent arrears or tenant protection rules. In a community of heirs, there's the added complication that rental income and costs have to be split among all heirs, which requires extra coordination. Renting out tends to pay off especially where demand is stable and you either have the time yourself or plan to bring in a property management company to handle things.
Selling and closing the matter cleanly
For many communities of heirs, selling ultimately turns out to be the most pragmatic solution. The proceeds are divided up, and each heir can do what suits their own situation with their share. Especially when heirs live in different places or have different financial plans, a sale creates clarity without anyone remaining permanently tied to a property – and to the other co-heirs. Our support with the sale can guide the process from the initial valuation all the way to the appointment with the Notar (notary), which makes coordination considerably easier when several parties are involved.
The speculation period for inherited properties
One point that often causes confusion with inherited properties is the Spekulationsfrist (speculation period). If a property is sold again within ten years of its purchase, Spekulationssteuer (speculation tax) generally applies to the profit. For inherited properties, the starting point is not the date of inheritance but the original purchase by the deceased. If the deceased bought the house more than ten years ago, the heirs can usually sell it tax-free. If the purchase was more recent, tax may be due on the sale – unless the property was used by the owner personally in the year of sale and the two years before that. These rules are not entirely straightforward, especially in cases of partial personal use or multiple heirs. Getting tax advice before selling can help avoid unpleasant surprises.
Why a realistic valuation should come first
Whichever path you ultimately choose, deciding without a realistic assessment of the property's value means deciding blind. The value depends on many factors: location, condition, year of construction, plot size, and the current market situation in the relevant region. Especially with older properties that may have been in family ownership for decades, the value is often quite different from what the heirs intuitively assume – either higher or lower. A well-founded valuation is also important because it forms the basis for negotiations within the community of heirs – for example, if one heir wants to buy out the others. We offer a free valuation that provides exactly this foundation, regardless of whether the property is ultimately sold, rented out, or kept.
The path to a clear decision
In practice, it helps to make the decision in stages rather than trying to settle everything at once. First, sort out the legal situation and the community of heirs. Then get a valuation to have a solid figure to work with. After that, honestly discuss the personal situation of everyone involved – who needs money, who has an emotional attachment, who lives far away. Only then can you seriously say whether keeping, renting, or selling is the right path. If you're unsure, you don't have to work through this alone. A look at current listings and comparable values also gives you a sense of how the local market is currently developing.
At L&B Immobiliya, we have been guiding communities of heirs through exactly these questions for many years – with a free valuation, advice in German, English, and Russian, and, if desired, complete handling of the process right through to the notary appointment. Simply get in touch via our contact page; we'll take the time to look at your specific situation.
