Selling a house to grandchildren

Many property owners consider passing on their property within the family. Selling a house to grandchildren is a particularly attractive way to secure the family's assets. But this raises a number of questions: Is this even possible and what do you need to bear in mind? In this guide, Wienrot Immobilien GmbH & Co. AG from Jena explains the most important aspects you should consider when selling a house to your grandchildren.

1. selling a house within the family: is that possible?

Yes, in principle you can sell your house to your grandchildren. Unlike a gift, a sale is a legally valid transaction in which both parties agree on a purchase price. However, there are a few legal and tax particularities to consider, as this is a property transaction within the family.

• Purchase agreement:
  Even when selling to family members, a notarised purchase agreement must be drawn up to regulate the details of the sale. This is a legally binding agreement that also applies to family members.
• Reasonable purchase price:
  An important point is that the purchase price should be in line with the market. If the price is set too low, the tax office may regard the sale as a disguised gift and may levy gift tax. An independent expert opinion on the value of the property can provide clarity here.
  

2. tax aspects of selling a house to grandchildren

The sale of a house to grandchildren can bring tax advantages, especially in comparison to a gift. However, certain rules must also be observed here:

• Speculation tax:
  If you have owned the property for less than 10 years and have not used it yourself, speculation tax may be payable on the sale. However, this does not apply if you have lived in the property yourself or the 10-year period has already expired.
• Gift tax:
  If you sell at a greatly reduced price, the tax office may treat the difference to the market value as a gift. A tax-free allowance of 200,000 euros applies to grandchildren. This means that no gift tax is payable up to this amount.

Example:
You sell your house in Jena, which has a market value of 400,000 euros, to your grandchildren for 200,000 euros. In this case, the tax office can treat the difference of 200,000 euros as a gift. However, thanks to the tax-free allowance, this amount would be exempt from gift tax.

3. observe inheritance and compulsory portion claims

When selling a house to grandchildren, it is important to consider possible compulsory portion claims by other heirs. If you sell the house at a reduced price or as part of an inheritance, other heirs, such as your children, could assert claims.

Tip:
Consultation with a notary or lawyer can help to clarify the legal situation and avoid disputes later on.

4. advantages of a sale compared to a gift

The sale of a house to grandchildren has several advantages over a gift:

• No direct gift tax, as long as the purchase price is in line with the market.
• The buyer (the grandchild) has clear ownership rights and assumes the obligations of the owner.
• The sale protects the house from possible claims by third parties, for example in the event of a care case.
  

5. selling a house in Jena: when is it worth selling to the grandchildren?

Especially in cities like Jena, where property prices have risen in recent years, it can be worth passing the house on to the next generation now. A sale to your grandchildren not only ensures that the property remains in the family, but also makes it possible to utilise the proceeds in a targeted manner. The experts at Wienrot Immobilien GmbH & Co AG will be happy to advise you on the best possible time and strategy for selling your home.

Conclusion: Selling a house to grandchildren - an attractive option

Selling a house to grandchildren is possible and offers a number of advantages, particularly from a tax and legal perspective. However, it is important to plan the process carefully to avoid potential pitfalls. Sound advice from property experts and a tax advisor is essential.