Question: The deceased had real estate abroad (land, houses, flats). What do I need to bear in mind when acquiring this property?
Answer: A number of steps are required to purchase a property. These steps are briefly outlined here and reference is made to other articles on the subject when the opportunity arises.
- Which law applies?
- Who has become an heir?
- Applying for a certificate of inheritance/European certificate of succession
- Transfer of the property
- Inheritance tax
I. Which law applies?
In international inheritance cases, the first thing that matters is which law applies to the inheritance in the first place. As a rule, it depends on the habitual residence of the testator. However, the testator's choice of law would take precedence. You can find further information in our Article on applicable law.
II. Who has become an heir?
If there is no will or it does not regulate the succession or regulates it inadequately, the legal succession applies. This is organised differently in the various countries, which is why we can only refer here to our Country reports on the member states and to the Country reports on third countries refer to.
Assuming that you have become an heir, it is important to establish whether there are any co-heirs and what rights any surviving spouse may have to the estate. Only when this has been clarified can you proceed further.
III. Application for a certificate of inheritance/European certificate of succession
If the estate is distributed in several European member states, it is advisable to use the Applying for a European Certificate of Succession. Where to apply for a European Certificate of Succession depends on which Courts with international jurisdiction are.
IV. Transfer of the property
The property should then be transferred. Most countries keep a register that is comparable to the German land register. The involvement of a notary is often necessary. The formalities for the transfer are regulated by the registering countries themselves.
V. Inheritance tax
Finally, the tax to be paid must be considered. The questions of tax rates, allowances and other privileges are to be answered according to national law to answer. Many heirs often do not realise that double taxation can also occur. Example: If the acquirer is German, he or she is generally subject to unlimited tax liability in Germany. This also applies to the acquisition of real estate assets that are also taxed in the country of domicile. A credit for taxes paid abroad can only be considered on the basis of any double taxation agreements or in accordance with Section 21 ErbStG.