2

Thank you in advance, I never thought about money twice before visiting this site!

Background Info: Germany. I am in my mid 20s. My long term boyfriend and I make around 100k a year together. He would be moving there together with me. If I continue my current carrer path and don't take too much time off for children, this sum will double in the next 10 years, but just assume it won't.

My dad has a barn with sheep and a nice big house. Too big for him now that he is retiring soon. He wants me to move back home in a couple of years to help him keep the house in good shape. The house is huge (more than 350 square meters of living space).

The relationship with my dad is excellent, we love and trust each other. One half of the house is in great shape. Everything has been renewed in the last 5 years. The other half needs quite a lot of work. It is still fine for living, but in the next 10 years I believe I need to invest 100-150k to keep it nice.

My dad and I were thinking of 3 possibilities for me to keep the house after his death.

Option 1: He sells me the house now for a symbolic low price.

Option 2: I buy the house for a more reasonable price, by paying a fixed amount each month until he dies.

Option 3: I inherit the house after his death.

My boyfriend and I were thinking of 2 possibilities on how to finance everything.

Option 1: My boyfriend pays me rent each month (we were thinking about 500€), and I pay for all expenses.

Option 2: We share all costs as good as possible, in the hope of staying together forever. ( We are planing to get married in 2021).

Security: I have around 50k in my bank, but I would also need to buy a car if I move there (countryside). My dad also has some real estate he could sell if everything goes down hill.

What are the best options in the long run? What kind of hidden costs do I have to expect in this type of scenario in Germany? Is this house to expensive to keep if I may become a single mom (60k a year)?

3

This answer is based on what I believe to be true about transferring real estate between family members in Germany based on my personal life experience. I personally was a party to some family-internal real estate deals in my life, but I can hardly claim to be a professional in this regard. I would really recommend you to find a professional notary ("Notar") and tax advisor to advise you on this instead of relying on what anonymous strangers on the Internet tell you.


Is the house worth more than 400.000€? Because that's the tax-exemption limit for both gifts and inheritances from parents to their children. The real value of your house is hard to estimate from your description, because it very much depends on location. Old farm houses in rural areas can be almost worthless, but when they are in metropole regions, they might be quite valuable.

If you sell the house for a symbolic price, the Finanzamt will assume it's a hidden gift and will insist to tax it as such.

The best way to get around most taxes would be to sell it for a fair price. In that case you are exempt from real estate transfer tax ("Grunderwerbssteuer"), because it's a real estate sale within the family.

In any case you will have to pay an additional tax to get the land register ("Grundbuch") changed and to pay the notary ("Notar"), which is both obligatory in Germany everytime real estate changes hands.

The construct where your dad sells you the property but does so in form of a private-to-private annuity loan which you then pay off to him is quite unusual. I have never heard anyone do something like that, so I am not sure what the implications would be. You should ask a notary about if that could work.

If you want a mortgage from your bank, they will likely insist that your boyfriend also becomes owner. That's because it allows them to demand money from either of you if you can't pay the mortgage anymore. This might be a quite bad deal, because your boyfriend does not have tax-exemption status and will pay gift / real estate transfer tax on half the value. You can avoid that if you marry before you obtain the house. In that case you will both own the house equally and enjoy your tax exemption status.

If you manage to talk your bank out of this and become the sole owner of the property, then that's a situation which is great for you but bad for your boyfriend. If you break up, he will be homeless. Even if you later marry and get divorced, he is only entitled to half the value increase of the house over that time ("Zugewinngemeinschaft").

Whether you call the money he pays to you each month "rent" or "contribution to household expenses" won't make much of a difference financially. But if he is officially a tennant with a contract, then he might enjoy certain legal protections when you decide to separate. You can't just kick him out because he enjoys the legally obligated notice period.

Is this house too expensive to keep if I may become a single mom (60k a year)?

Intuitively I would say it's unlikely you can afford to maintain 350 m² of an old building on a single income, but you should ask your dad about that. He should know exactly what that building costs per year in maintenance and utilities. Draw up a budget to see if you can afford that without a second income.

  • Thank you so much for your answer. I believe the inheritance including the barn, fields and animals will be close to a million euro. I do want to continue the farm as a hobby (like my dad, I know it is a huge „freetime activity“). That is also the reason why he was able to sustain everything. Working a day job and having a farm. The house alone is probably worth less than 400k on the market. Even though he just invested around 200k in the last years. – Pudora Apr 2 at 15:23
  • 1
    @Pudora The field is also real estate, but animals and farming equipment are just regular property. If the farm is actually a registered company, then additional legal complications apply when transferring ownership. – Philipp Apr 2 at 15:26
  • Also I am wondering if I can make a marriage contract „Gütertrennung“ that prevents him from owning half of it? – Pudora Apr 2 at 15:34
  • 1
    @Pudora Yes, you could do that, if he agrees. But then he will likely not get around paying tax for his half if he wants to be co-owner of the property. This is also a question for a legal professional. – Philipp Apr 2 at 15:35
  • Thank you so much for your time. I will discuss your answer with my boyfriend later. – Pudora Apr 2 at 15:38

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.