- A child who gets the house from the parents and has to pay off the siblings legally pays no Schenkungsteuer (German gift tax) on the payout amount — but the siblings owe tax on what they receive
"Transferring a house and paying off siblings" is one of the most searched scenarios — and at the same time one with the most unrecognised traps. The typical constellation: parents want to give the house to one child; the other children should be compensated "somehow".
If one child gets the house and pays off the siblings, that is legally either partition of an Erbengemeinschaft, a Pflichtteil payment, or a family agreement — each with its own tax consequences. Anyone who plans this verbally and transfers without a notary all but guarantees a later dispute.
Three constellations — three legal regimes
1. Payout as partition of the Erbengemeinschaft
If the parents have died and several children become co-heirs, an Erbengemeinschaft arises. One of the children can take over the house and pay off the others out of the joint estate (§ 2042 BGB).
Tax point: the payout itself is NOT Schenkungsteuer — it is partition of an Erbengemeinschaft. Grunderwerbsteuer (real estate transfer tax, 4.5 to 6.5 percent of the payout amount, depending on the federal state) can however arise where the payout is treated as having a sale element.
More on this in the topic hub: Erbengemeinschaft.
2. Payout as Pflichtteil payment
If the parents are still alive, or the house was transferred before death and a sibling was disinherited, the disinherited child can demand the Pflichtteil after the parents' death (§ 2303 BGB) — and Pflichtteilsergaenzung (claim for supplementation, § 2325 BGB) for Schenkungen of the last 10 years.
Pflichtteil payments are money claims, not in rem claims — the house itself stays with the donee. From a tax perspective: on the recipient's side the Pflichtteil payment is treated as an inheritance and so falls under the Erbschaftsteuer (German inheritance tax), with the allowance under § 16 ErbStG.
3. Payout as a lifetime family agreement
The most common variant in practice: the parents gift the house to one child AND oblige that child to pay the siblings a specific cash amount or other assets. This Auflage (charge) has to be notarised.
From a tax perspective: the donee can deduct the payment to the siblings from the value of the Schenkung — its own Schenkungsteuer is reduced accordingly. The siblings receive their payout tax-neutral because the burden on the Schenkung benefits them economically.
CAUTION: if the parents later release the Auflage, a fresh Schenkung to the donee arises in the amount of the released sum.
Calculation formula: how much should the siblings receive?
There is NO statutory formula — the distribution depends on the chosen construction. Three standard models:
| Model | Payout formula | Tax effect |
|---|---|---|
| Equal treatment | (market value ÷ number of children) × (number of siblings) | Clearly fair, but expensive for the donee |
| Pflichtteil safety | Pflichtteil share of the individual sibling × market value | Minimum variant, avoids later litigation |
| Pflichtteilsverzicht (waiver of the compulsory share, § 2346 BGB) against settlement payment | Freely negotiated amount, notarised | Maximum planning certainty, durable |
Worked example: house with EUR 600,000 market value, parents plus three children, one child to receive the house.
- Equal treatment: EUR 600,000 ÷ 3 = EUR 200,000 per sibling, so EUR 400,000 payout in total
- Pflichtteil safety: the Pflichtteil share is 1/2 of 1/3 = 1/6, so EUR 100,000 per sibling
- Pflichtteilsverzicht against settlement: for example EUR 150,000 per sibling (between Pflichtteil and equal treatment), recorded in a notarial deed
In my practice the Pflichtteilsverzicht variant is by some margin the most stable — it creates clarity during the parents' lifetime and prevents knock-on disputes.
Step by step: paying off siblings fairly in 6 stages
- Determine the market value. Valuation report or at least three comparison offers from estate agents. Document the value with a date.
- Hold a family meeting. Get all siblings round a table — clarify expectations, hear concerns, defuse conflict.
- Choose the strategy. Which of the three models (equal treatment / Pflichtteil / waiver) fits the family situation?
- Run the tax numbers. Where are allowances unused? Is splitting across several 10-year tranches worthwhile? Can other assets (bank assets, securities) be included?
- Notarise. Schenkung contract with the payout Auflage, Pflichtteilsverzicht declarations from the siblings, reclaim clauses.
- Execution and notification. Land-register change, payout to the siblings, notification to the tax office under § 30 ErbStG by all parties.
Tax optimisation: payout across 10-year tranches
Anyone who spreads the sibling payout over several years can use the allowances multiple times — but ONLY if the payout is structured as a Schenkung in its own right, not as an Auflage.
Example: donee is supposed to pay siblings EUR 200,000. Instead of a single payment, the parents enter into Schenkung contracts directly with the siblings — EUR 100,000 now and EUR 100,000 in 10 years' time. Both Schenkungen are below the parent-child allowance of EUR 400,000 every 10 years. Tax-free.
Precondition: the parents need the liquidity for this direct payment. If they do not: a Schenkung contract with a suspensive condition "payment from the later sale of the house".
Comparative calculation: payout strategies
Starting point: parents have a house worth EUR 800,000, three children (Tom gets the house, Anna and Lisa are paid off).
| Strategy | Payout per Anna/Lisa | Tom pays | Schenkungsteuer risk |
|---|---|---|---|
| Pure gift to Tom | EUR 0 | EUR 0 | Pflichtteilsergaenzung for Anna/Lisa after death |
| Auflage Pflichtteil | EUR 133,333 | EUR 266,666 to siblings | Clear, ends the Pflichtteil claim |
| Auflage equal treatment | EUR 266,666 | EUR 533,333 to siblings | High, often not feasible for Tom |
| Pflichtteilsverzicht against settlement | EUR 150,000 notarised | EUR 300,000 | Maximum certainty |
| Parents gift directly | EUR 150,000 each from the parents | EUR 0 | Within the allowance, clean |
The "parents gift directly" strategy is usually the most elegant — no payout obligation for Tom, no later Pflichtteil conflicts, fully within the allowance.
Frequently asked questions
Do the siblings always have to be paid off?
No. If the parents gift the house during their lifetime and the siblings are not expressly considered, no immediate payout obligation arises. But after the parents' death the siblings can demand Pflichtteilsergaenzung (§ 2325 BGB) if the Schenkung took place in the last 10 years.
How high is the Pflichtteil share for a sibling?
Half the statutory share (§ 2303 BGB). With three children the statutory share per child is 1/3, so the Pflichtteil is 1/6 of the estate.
Can the sibling payout be made in instalments?
Yes, by notarial agreement. The payout can be made in instalments, with a suspensive condition, or on a later sale of the house. The point is that all conditions have to be set out in the notarial Schenkung contract.
What happens if I do not make the sibling payout?
If the payout is structured as an Auflage in the Schenkung contract, the siblings can enforce the payout in court. The Schenkung can in certain circumstances be reclaimed (§ 527 BGB).
Does the payment to siblings reduce my Schenkungsteuer?
Yes. If the donee has to pay off the siblings (notarial Auflage), the taxable enrichment under the Schenkungsteuer is reduced by the payout amount. The donee only pays tax on the difference between the market value and the payout.
What is a Pflichtteilsverzicht and when is it worthwhile?
A notarised waiver by the siblings of the Pflichtteil — usually against a settlement payment (§ 2346 BGB). It is worthwhile where the parents want clarity during their lifetime and the siblings are willing to take a fixed amount now rather than raise indeterminate claims later. 100 percent planning certainty.
Is there Grunderwerbsteuer on the payout?
In certain constellations yes. If the payout is treated as having a sale element (for example through assumption of a mortgage), Grunderwerbsteuer can arise (4.5 to 6.5 percent depending on the federal state). For a pure Schenkung with a Pflichtteil Auflage, generally not.
What happens if the parents later have more siblings?
Births after the Schenkung do NOT change the Pflichtteil claims of the existing siblings (the cut-off date is the death). BUT: if the parents still have assets to be inherited later, the inheritance shares will change. A notarial amendment of the Schenkung contract is possible.
More detailed answers
- Transferring a house in 2026: main guide with instructions
- Transferring a house with a lifelong Wohnrecht
- Costs of transferring a house in 2026
- Transferring a house, the 10-year clawback period and care
- Transferring the house to one child and the Pflichtteil
- Unwinding the Erbengemeinschaft and partition
- Pflichtteilsverzicht in detail
Lead magnet: structuring the payout
- Erbschaftsteuer calculator — Calculation of Pflichtteil claims and tax burden.
- Pflichtteil protection — Strategies for legal reduction of the Pflichtteil.
- Book a first meeting — Individual payout strategy for your family.
Authority sources
- § 2042 BGB (Partition of the Erbengemeinschaft)
- § 2303 BGB (Pflichtteil claim)
- § 2325 BGB (Pflichtteilsergaenzung on Schenkungen)
- § 2346 BGB (Pflichtteilsverzicht)
- § 527 BGB (Clawback for non-performance of an Auflage)
- § 16 ErbStG (Schenkungsteuer allowances)
- § 30 ErbStG (Notification duty)
- § 7 ErbStG (Schenkungen inter vivos)
- BGH judgment of 27.11.1991 — IV ZR 164/90 (Pflichtteilsergaenzung with Auflagen)
Free guide
Forced-Share Protection Strategies
6 strategies, German Federal Court rulings, 3 examples
10-page guide on reducing the forced share (Pflichtteil): Berliner Testament with penalty clauses, Federal Court case law on usufruct (Nießbrauch), family pool and more.
- ✓ 10 pages, tables and BGH rulings
- ✓ 6 strategies to reduce exposure
- ✓ 3 worked examples (500K to 8 M EUR)
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