Inheritance Real Estate Valuations for Properties in Spain
Imagine this scenario: a distant relative in Germany, who was wealthy, has just passed away. They had monetary and real estate assets in both Germany and Spain. Now you must assess the value of the inheritance. But how do you do this? And in what language and format should this assessment take place?
These are questions that heirs frequently encounter, leading them to consult a lawyer.
When approaching this subject, you must first understand that a deceased individual who was a resident of Germany is subject to inheritance taxation according to German Law. All assets, regardless of their location, must be reported to the appropriate German district court or tax office as part of the inheritance.
If the inheritance tax-exempt thresholds are surpassed, paying inheritance tax in Germany becomes necessary. If the heirs have a residence in Spain, they must also declare the inheritance in Spain, and this must be done within six months of the date of death. In this case, inheritance tax will also be due in Spain, and any amounts already paid in Germany may be credited under the double taxation agreement.
If the deceased individual in Germany owned property in Spain, the inheritance must generally be reported in Spain as well, even if neither the deceased nor the heirs are residents there. This is because properties in the EU are always taxed in the country where they are located.
It’s therefore always advisable to seek the expertise of international professionals – lawyers and real estate appraisers – for matters related to international inheritance.
While a valuation from an accredited appraisal firm in Spain (not a conventional appraiser) is suitable for presenting to banks in Spain, a Spanish valuation is usually not recognised by a German local court without a formal translation. Moreover, translations provided by a certified translator can be costly.
However, the situation becomes even more complicated: not all valuation reports are the same. And court appraisals for properties in Spain aren’t either. In this case, you have to make sure that it’s clear whether the valuation report is intended for a mortgage application or for a civil claim in court (such as a lawsuit seeking to reverse a sale).
However, in the case of a gift or inheritance, a different type of valuation report specific to the circumstance is required, either for assessment in Spain or for a local court / tax office in Germany.
And when it comes to evaluating the potential sale value (market value) of a property, yet another type of valuation report is applicable.
Furthermore, the valuation methods vary too. Appraisals can be conducted using the comparative method, income approach, or even the assessment of insurance value (cost approach), as seen in situations involving complete property loss (for processing claims).
So, as you might have noticed, once again, things are far from straightforward. Don’t hesitate to reach out to us; we’re available to offer comprehensive assistance when it comes to real estate valuations.
That’s because we’ve been working as architects and construction experts with Spanish courts along the Costa del Sol since 1996. We’re also members of RICS (Royal Institution of Chartered Surveyors) and BDSF (Bundesverband Deutscher Sachverständiger und Fachgutachter e.V.) and specialise in crafting property valuation reports in Spain and can provide consultations in English, German or Spanish.
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