Tax Tips for Property Owners: Efficient Gift Structuring
The gifting of real estate in Germany can be tax complex, as it is subject to gift tax. However, there are several strategies to minimize the tax burden. Here are some practical tips:
1. Utilize Allowances
- Degree of Kinship: The amount of allowances depends on the degree of kinship. Spouses can receive up to 500,000 euros tax-free, children up to 400,000 euros, and grandchildren up to 200,000 euros.
- Ten-Year Repetition: These allowances can be used again every ten years, which means larger asset transfers can be spread over several years.
2. Spread Gifts Over Several Years
- Installment Gifts: By splitting the gift over several years, you can optimally utilize the allowances and reduce the tax burden.
3. Chain Gifts
- Strategic Transfer: A chain gift, where the property is first gifted to a close person who then gives it further, can lower the tax burden.
4. Adoption or Marriage
- Improve Degree of Kinship: Through adoption or marriage, the degree of kinship can be improved, leading to higher allowances and lower tax rates.
5. Correctly Determine Market Value
- Tax Calculation: The market value of the property is crucial for tax calculation. An accurate determination can help minimize the tax burden.
6. Tax Advisory
- Professional Support: It is advisable to consult a tax advisor to develop the best strategy for the individual situation.
7. Gifting During Lifetime
- Reduce Inheritance Taxes: Gifting during one’s lifetime can help avoid or reduce future inheritance taxes.
These strategies can effectively help minimize the tax burden when gifting real estate in Germany and reduce financial burdens for private investors and savers.