1. What is real estate donation?

For a real estate donation the property owner transfers his property or property to third parties free of charge. This is the case when an owner gives away his property to his children, for example. In this context, a notary accompanies the process and the recipient is entered in the land register. The giver receives a certain security by being usufruct uses and this also in the land register register. In addition, with the usufruct Save gift tax.

1.1. What is the usufruct?

The right of usufruct in real estate includes this Lifelong right to live and use a property. This right is notarized and entered in the land register. In comparison to the right of residence, the usufructuary may also own the house or the condominium use economically and generate rental income, for example.

The right of usufruct can also be extended to several people, so that, for example, spouses or other residents of the house can benefit from the usufruct. Usually the usufruct expires at the end of the life of the usufructuary. However, this right can also be used for a limited period of time or removed from the land register by mutual agreement.

2. What does the usufructuary have to consider when setting up a photovoltaic system?

The construction of the PV system must be coordinated with the owner in any case. Basically you need permission from the owners as this is what it is is a structural change.

As far as funding measures for PV systems are concerned, the requirements of the funding bodies must be observed. In addition to cheap promotional loans in the KfW 270 program, which you can apply for through your house bank, the federal states also have their own promotional offers. There may be other points to consider here, which you can find in the respective funding requirements.

3. When can it make sense to give away a property?

A real estate gift is advisable if use is made of the so-called usufruct. Because only then will it work inheritance tax savings.

In addition, a real estate gift is an advantage if major renovation work can no longer be realized with a small pension. Because after the donation, the usufructuary is only obliged to pay for small repairs and the usual operating costs. Expensive renovation work or the modernization the property is then the responsibility of the recipient.

4. What risks arise when donating a property?

First and foremost, the donation of a property during one’s lifetime means that a high asset changes hands. Because the capital is not available in liquid form, but is in the property, but a house or a condominium as an investment forms a worthwhile basis for security in old age.

With the donation, the donor renounces this capital investment. As compensation, the right of usufruct is entered in the land register.

5. How can you save on taxes by donating real estate?

Anyone considering donating their property can benefit from a reduction in gift tax. This is the case when a Usufruct right in the land register was entered.

Because the Federal Court of Justice recognizes that the usufructuary does not want to give up the use of the property despite the donation. At the same time he can new owners no rental income achieve since the property is occupied by the usufructuary. Consequently, the Value of the usufruct deducted from the market value of the property.

The value of the usufruct corresponds to that value in use per year and the life expectancy of the usufructuary. The latter is determined using statistics. It is therefore an average value. The following applies: The value of the usufruct decreases as a percentage of the donor’s age. Under certain circumstances, it is even possible that the gift tax is completely eliminated due to the exemption.

5.1. What allowances apply to gift tax?

According to the Inheritance and Gift Tax Act, the property value at a real estate donation Basis for calculating gift tax. The market value is determined at the time when the recipient is entered as the owner in the land register.

At the same time, it is important to consider in which family relationship the giver stands by the recipient. Because as a result, a specific tax rate and a specific tax allowance used. The spouse benefits from a higher allowance than nieces or nephews.

6. Conclusion

In a real estate donation, the real estate owner transfers his house or condominium to another person. Since he passes on the capital investment, he can benefit of usufruct, which must be entered in the land register. The right of usufruct gives the donor a lifelong right to live and use the property and the recipient benefits from the tax exemption. However, any structural changes such as the installation of a solar thermal or photovoltaic system must be discussed with the new owner and require his approval.