Real estate
Inheriting or gifting a home
Inheriting a home: what should you watch out for?
Inheriting a home can mean a great deal, but also entails significant risks. A house is not always easy to sell, and it regularly happens that the mortgage debt is higher than the value of the home. In such a situation, inheriting a home can turn out to be financially disadvantageous.
It can therefore be wise to accept an inheritance with benefit of inventory. You then accept the estate only if something remains after all debts have been paid. This way you avoid being left with any residual debt.
Determining the value of the home
When there are several heirs, it is important to establish the value of the home, as this value determines the size of each heir's share. In many cases, a valuation is carried out for this purpose. Sometimes the will already describes how the value is to be determined.
Please note: the value of the home may differ from the WOZ value (property tax valuation) that you use for the inheritance tax.
Inheritance tax and WOZ value
For the inheritance tax return, the WOZ value (official property valuation) of the previous year is usually used. Do you think this value is too high? Then you can request a WOZ notice in your own name and, if necessary, lodge an objection with the municipality. This may affect the amount of inheritance tax you have to pay.
Home as a legacy
Sometimes a home is not inherited but is allocated to one person by way of a legacy. It is then important to check whether the home is acquired free of mortgage or whether the debt is also part of the legacy. A legacy may also be refused.
Gifting a home
A home can also be gifted during your lifetime. This can be done in various ways, for example:
- full gift of the home;
- sale at market value with a waiver of part of the purchase price;
- sale below market value.
With a gift, both legal and tax consequences play an important role. The WOZ value determines the gift tax, while the market value is important for the transfer tax. Practical questions also come into play, such as: will the donor continue to live in the home or will the home be rented out?
In addition, it may be advisable to include an exclusion clause, so that the home stays within the family in the event of, for example, a divorce.
Good advice matters
Whether it concerns inheriting or gifting a home: every situation is different and calls for careful consideration. We are happy to work with you to ensure that everything is properly arranged from a legal and tax perspective, so that a home transfer does not cause unexpected problems.
What can we do for you?
Frequently asked questions
Registering the purchase agreement is not mandatory. You can choose to do so. By registering the purchase agreement, the buyer is protected against risks such as bankruptcies and attachments.
Incidentally, registering the purchase agreement does involve costs. If you initially chose not to register the purchase agreement but you are unsure whether you should have, this can also be arranged on request.
The purchase agreement contains the agreements made between seller and buyer regarding the sale. Think of the purchase price, the date of transfer and any conditions subsequent.
The deed of transfer is drawn up by the notary and effects the legal transfer of ownership. After signing at the notary on the date of transfer, it is registered with the Land Registry. After registration with the Land Registry, you have officially become the owner of the home.
Pursuant to the Anti-Money Laundering and Counter-Terrorist Financing Act and the secondary legislation arising from it (the ‘WWFT’), we are required to record certain details of our clients. In connection with this legal obligation, we ask you a number of questions about your identity in our questionnaire.
In addition, the Dutch government has imposed on us the obligation to report unusual transactions and to investigate the organisational structure and the source of funds.
We understand that you may not like providing this information. However, this obligation to ask for information was not devised by us but is a consequence of the law. As a result, even if we have known you for years and feel good about the transaction, we are required to verify the source of funds. We ask all of our questions in order to put your file in order and allow the transaction to proceed. Please also bear in mind that we may need to ask you to provide further relevant documentation and specifications.
