Transferring your own home tax-free

If you bequeath your own home, it is possible to remain tax-free under certain conditions. This is because the Inheritance and Gift Tax Act contains a special tax exemption provision. According to this provision, the family home can be transferred tax-free to the spouse or at least partly tax-exempt be bequeathed to children and, if applicable, grandchildren

As Family home within the meaning of the Inheritance and Gift Tax Act (Erbschaft- und Schenkungsteuergesetz) is a developed property

• which at the time of transfer is located in the European Union (EU) or in the European Economic Area (EEA),

• which is (partially) owned by the transferor, and

• in which the transferor himself occupies a dwelling.

  
  During lifetime, a tax-free transfer of the family home is only possible to the spouse and without any retention periods or other restrictions. In addition to the transfer of the family home, all asset transfers related to the family home are also tax-exempt. These are, for example, investments made for maintenance or expansion.