Transfer real estate during your lifetime - still save taxes in 2022

Anyone who inherits or receives a property as a gift could pay more tax on it from 2023. "All the more reason to look into the issue of anticipated inheritance," says Martin Thelen, press spokesman for the Federal Chamber of Notaries. 

The background to the expected increase in inheritance and gift tax is the draft of the Annual Tax Act 2022, which provides for changes to the tax valuation of real estate. As a result, the values used by the tax authorities to calculate inheritance and gift tax on real estate may increase from next year. This is a necessary adjustment to the Real Estate Valuation Ordinance from 2021. In doing so, the legislator must observe the requirements of the Federal Constitutional Court, according to which the valuation of real estate must be based on the market value.

So anyone who is already thinking about transferring property as a gift could benefit from a transfer this year from a tax perspective. "The donor can remain living in the property after the transfer or continue to rent it out," explains Thelen. "To protect the donor, a right of residence or usufruct can be entered in the land register." Such reserved rights of use also reduce the value of the gifted property for tax purposes.

However, it is not only tax aspects that speak in favor of transferring real estate during your lifetime rather than at death. For example, possible claims by third parties, such as those entitled to a compulsory portion or social benefit providers, can be avoided or at least reduced. Many people also want to create clear conditions during their lifetime and transfer responsibility for the property to the next generation.

Early asset transfers can make sense from a variety of perspectives. Notaries will be happy to advise you on this.