The dissolution of a community of heirs - tax challenges and solutions

The dissolution of a community of heirs presents heirs with complex tax and legal challenges - especially if real estate is included in the estate. Early planning and professional advice are crucial in order to avoid tax pitfalls and ensure a smooth transfer.

How is a community of heirs created?

A community of heirs is automatically created when several people inherit together. As long as the division of the estate has not been completed, the heirs administer the assets of the estate jointly. The division can be settled either by mutual agreement or - if there is disagreement - through a court procedure.

Real estate transfer options

There are three main options for real estate:

1. Sale of the property - The proceeds are divided among the heirs.‍
2. Takeover by an heir - An heir takes over the property and compensates the co-heirs financially.‍
3. Continuation as a community of heirs - the property remains in the joint ownership of the heirs.

Tax aspects of the acquisition

‍Ifan heir decides to take over a property, the transfer is generally tax-neutral. This means that

• No property gains tax is payable as there is no sale for tax purposes (tax deferral)
• The acquiring heir follows in the tax "footsteps" of the community of heirs and assumes the original acquisition value and the holding period of the property.

Property gains tax on subsequent sale

‍Ifthe heir sells the property at a later date, the property gains tax is calculated on the basis of the original acquisition value. A longer period of ownership can have a positive tax effect, as many cantons reduce the tax burden for long-term ownership.

‍Financialcompensation of the co-heirs

‍Ifan heir takes over the property, he or she must usually pay out the other heirs. This payment is tax-free for the recipients, but the acquiring heir cannot claim it as acquisition costs.

‍Special featuresof mortgages

‍Existingmortgages can be taken over with the property. It is important to know this:

• The mortgage assumption does not count as a purchase price for tax purposes.
• Any associated compensation payment also remains tax-neutral

Tax optimization strategies

‍Inorder to minimize tax burdens, the following measures are recommended:

• Early planning - clear agreements between the heirs avoid conflicts.
• Documentation of values - An exact calculation of the original and current property value is essential.
• Longer holding period - If you delay the sale for a few years, you can benefit from a lower tax rate.

‍Conclusion

‍Thetransfer of a property from a community of heirs can be tax-neutral if it takes place as part of the division of an estate. Anyone who decides to take this route should be aware of the tax consequences - especially with regard to a later sale. Sound advice will help you to make the most of the financial and tax advantages.

‍Do youhave questions about your real estate inheritance? Or would you like to determine the value of a property?

‍The Immo Portfolio team supports you with expertise and experience in the tax-optimized transfer of estate properties. Contact us for an individual consultation!