Martin Kahllund, specialist lawyer for tax law, and Ludger Bornewasser, specialist lawyer for inheritance law, explain, where the greatest risks lie and how to avoid an inheritance tax fiasco.

Mistake 1: Accepting the property value without checking

Many heirs rely on the tax office’s assessment – ​​an expensive mistake. Since the reform of the Valuation Act in 2022, the tax values ​​are often at the same level as the market value or even higher.

Kahllund warns: “The biggest mistake when it comes to inherited real estate is to underestimate the complexity of valuing these properties and not to critically examine the resulting value.”

This can have fatal consequences, especially in popular regions. “In large cities, the tax values ​​are often even higher than the actual value,” says Kahllund. An appraisal by a certified expert could help to significantly reduce the tax burden.

Mistake 2: Not budgeting money for taxes

Real estate is worth a lot on paper – but it doesn’t provide any liquidity. Those who have no reserves often have to apply for a deferral of the taxes due. But that can be expensive: from the second year onwards, six percent interest accrues.

Specialist lawyer Kahllund warns of the consequences: the tax could lead to “a forced sale of inherited assets”.

There are relief measures in certain cases, for example in the case of rented real estate or business assets. But without planning, many heirs face exactly this scenario: assets are there, but not available.

Mistake 3: Missing important deadlines

Heirs have to act quickly, otherwise it will be expensive. These deadlines are particularly crucial:

• Report the inheritance to the tax office within three months
• Objection to tax assessment: only one month
• Renunciation of inheritance: six weeks

Kahllund emphasizes: “An inheritance or a gift must be reported to the tax office in writing within three months of becoming aware of it. This is the most important deadline.”

Even after that, there is little room for maneuver. Anyone who receives a tax assessment and does not respond often loses the chance to make corrections.

Mistake 4: Accepting inheritance too quickly

Many people automatically accept an inheritance without checking the tax consequences. This is exactly what can become a problem.

Because if you don’t turn down an inheritance, you automatically accept it – including all tax consequences. Bornewasser points out that a renunciation is only possible within six weeks from the time you find out about the inheritance.

Anyone who allows this deadline to pass no longer has the opportunity to subsequently decide against an inheritance that is tax-unfavorable.

Mistake 5: Leaving allowances unused

A classic mistake: Families do not make optimal use of their allowances. If, for example, only one spouse is named as the sole heir, a lot of tax-free potential remains unused.

Bornewasser explains: “A tax-unfavorable person is often appointed as the sole heir,” which means that allowances are forfeited.

In certain cases, it can therefore make sense for an inheritance to be rejected – for example so that several children can inherit directly and use their allowances. “What the wife receives in return for the renunciation is considered by the law to have been received from the testator,” says Bornewasser.

Kahllund adds: “The allowances for inheritance tax arise every ten years.” Anyone who doesn’t take this into account often wastes considerable amounts of money.

Mistake 6: Using tax rules incorrectly for the family home

The family home you use yourself can be inherited tax-free, but only under strict conditions.

What is particularly important is the timing: According to Bornewasser, self-use must take place “immediately”. Case law generally sets a maximum deadline for this of six months.

In addition, the heir must live in the property for at least ten years. Important to know: The tax exemption will expire retroactively if this deadline is not met – there is no pro rata benefit.

In addition, the tax exemption for children is limited to a living area of ​​200 square meters – areas beyond this are taxed proportionately.

Anyone who moves in too late, moves out early or exceeds the space limit risks paying significant back taxes.

Mistake 7: Claiming compulsory portion incorrectly

There is also an often overlooked tax trap lurking with the compulsory portion. Many of those affected initially demand the maximum possible claim – without considering the tax consequences.

That can be expensive. Because: Anyone who demands a high compulsory share but later waives part of it risks an unnecessarily high tax burden.

Bornewasser explains: If the full compulsory portion is claimed but later reduced, “the original amount remains taxable.”

A theoretical example: A disinherited child has a compulsory share claim of 75,000 euros against the mother as heir. Initially it demands the full amount, but later agrees on 50,000 euros. The result: Although only 50,000 euros are paid, the tax office can still use 75,000 euros as the basis.

Important: For children, there is an inheritance tax allowance of 400,000 euros, which is available every ten years. If this is exceeded, the assessment base being too high can have a particularly strong impact – meaning more is taxed than was actually paid.

Three measures against the tax fiasco

Kahllund advises: “Think about who should get what in what form and what the tax consequences would be, as well as having an overview of the values, early in your lifetime.”

If you have larger assets, you should start transferring them early and involve the family. And especially for companies, you have to keep an eye on the requirements for tax advantages.

Bornewasser adds in the event that the inheritance has already occurred:

1. Check within the six-week period whether a refusal makes sense.
2. clarify quickly, whether the family home rule is used can be.
3. Check the tax assessment carefully – especially property values, participation rates and tax class.

His advice: If you know deadlines and check options, you can still save considerable amounts even after the inheritance has occurred.