Et is a case that happens all the time in Germany: the adult children have long since moved out. Then, unfortunately, the spouse died. In the big house that once housed an entire family, now only the widow lives.
It feels lonely now when so many rooms in the house are unused. And the whole thing is also expensive, because the maintenance of a large property always costs money. The widow would therefore like to move into a smaller apartment, preferably in the city where her children live and where there is a better supply of doctors, culture and other important infrastructure than in the surrounding area, where she has lived up to now.
Such a move would not only be good for her, but also for society. A large house would be free for a new family that urgently needs housing. Four or five people live there instead of one – the scarce living space would be better used.
Tax-free only if the widow stays in the house for another ten years
But the state does a lot to ensure that the lady finds it difficult to move out and sell the house or that both are even prevented. The main obstacle is tax law. Because a well-intentioned regulation in the inheritance tax becomes a problem.
If the spouse dies and his surviving partner inherits the family home, she does not have to pay any inheritance tax on it – unlike, for example, on the inherited securities account of the deceased, which she has to pay tax on. The regulation is intended to prevent the widow from having to sell the house because she cannot afford the inheritance tax. So far so good.
But the tax exemption has a catch. It is only granted if the survivor stays in the family home for another ten years (exception: she has to go to a nursing home). And it is precisely this long period of time that prevents the widow from moving out after the death of her partner. If she did that, she would have to pay inheritance tax. It is true that she has an allowance of 500,000 euros for inheritance tax.
In addition, there is the so-called “special pension allowance” of EUR 256,000 (which, however, is reduced by tax-free pension payments such as the survivor’s pension). The inherited assets are therefore only subject to tax to the extent that they exceed these allowances. However, in the expensive big cities, these are quickly exceeded even for average houses. And then it gets expensive: Anyone who, after deducting the allowances and chargeable “inheritance costs”, still has to pay tax on 300,000 euros, for example, pays 11 percent as a spouse, i.e. 33,000 euros.
There is a shortage of 700,000 apartments
It is bitter that the problem occurs in the popular metropolitan areas where real estate has become particularly expensive in the past ten years. Because this is where the housing shortage is greatest and efficient use of living space is therefore very important. In a study conducted this year, the renowned Pestel Institute calculated that there was a shortage of 700,000 apartments in Germany.
The reason is a high level of immigration from Ukraine, but also from classic refugee countries such as Afghanistan, Syria or Africa. About 30 percent of the refugees want to stay in Germany in the long term. And even if the number of inhabitants in a city is not increasing, the number of households is still growing because more people live alone or separately. In addition, according to the institute, ten percent of all apartments have to be demolished because they cannot be renovated or because it is too expensive. By 2045, 350,000 to 400,000 homes would have to be built every year.
In 2022 it was just under 300,000 and the forecasts for this year and next look even more pessimistic. The high building loan interest rates and the sharp rise in building prices are making new buildings so expensive that rents have to be so high that fewer and fewer people can pay them. The Pestel Institute estimates that new buildings currently have to be rented for at least EUR 16.50 per square meter to be economical. As a result, fewer new buildings are likely to be built in the future.
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