Man from Munich inherits 8 million house, now debts plague him: “City changes hands”
It looks magnificent, his house. And yet Wolfgang Donhärl finds it difficult to smile during the photo session in front of the multi-family block.
Munich – For a good reason: After the death of their mother, he and his sister inherited the building on Aurbacherstrasse in 2017. The result: the inheritance tax was due. And dying is a whopping one million euros! “First of all, I had to take out a loan.” The tax is based on the standard land value. In 2017 it was 8.7 million euros for Donhärls Haus in der Au. This amount was taxed.
He now carries around the one million euros in debt. “How do you want to compensate for that as a social landlord?” He demands amounts from his tenants that are below the rent index anyway. He is not concerned with profit, but with good and long-term tenancies.
Disadvantages for tenants: The inheritance tax has become a rent driver
Donhärl’s situation A fundamental problem for private landlords, says lawyer Rudolf Stürzer from the Haus und Grund association. “Many heirs can no longer pay their taxes.” What at first sounds like a luxury problem has far-reaching consequences for tenants. “The inheritance tax has become a rent driver,” says Stürzer. Because in order to control loans, many landlords are forced to increase rents – or sell. Then it is usually not a private person who buys, but an investor. “And then another wind blows in the house,” says Stürzer.
“It’s a problem that many politicians don’t see,” says the lawyer. That’s why he and Donhärl met with the member of the Bundestag Claudia Thousand (SPD) on Monday – to stimulate a political debate at the federal level.
Munich: Landlord plans to inherit debts – expert presents three demands
Stürzer combats three demands: adjust and regionalize tax allowances. The allowances are calculated the same nationwide – in expensive regions such as Munich property heirs lose out. Second, the inheritance tax should not be based on the value of the land, but on the income from the house. This means that if a landlord demands moderate rents, this must be taken into account for tax purposes. Finally, if an owner agrees to only increase rents to a certain extent after an inheritance, they should be partially exempt from inheritance tax. Donhärl adds: There may be an entry in the land register for this – if the house were sold, the entire inheritance tax would then be due.
“The city is slowly changing hands”
Stürzer: “Many think: if someone owns an apartment building, that’s whining at a high level. But very few think about the effects on tenants.” You have to keep an eye on long-term development, says Donhärl: “The city is changing hands.”
Volker Rastatter from the Munich Tenants’ Association also sees the regulation of inheritance tax as a potential problem for tenants. “Every sale to an investor usually means that many tenants have to move out because they can no longer afford the rent in the medium term,” says Rastätter. For him, a possible solution would be: “The high inheritance tax can be reduced for fair landlords who want to get cheap rents for their tenants by deferring it and also partially waiving it – as long as they act fairly.”
