Taking over your parents' house and buying out your siblings

The calculation has three steps. First, the value of the house on the day of division. From that, deduct the mortgage still secured on it. What remains is the net value. You divide it according to the inheritance shares.¹ Without a will, children inherit in equal shares.¹ With three siblings, each receives one third.

Whoever takes over does not pay themselves. Their third is in the house. They pay the other two thirds in money, and they take over the mortgage.¹

Two things can shift the figures. Perhaps a sibling already received money while the parents were alive, say for a flat. It usually counts against their share. This is called equalisation (Ausgleichung).¹ And if one parent is still alive, they have a priority right of their own to the family home.¹ See the page on widowhood.

What this means for you: everything depends on the net value. And that depends on the value of the house.

At its market value (Verkehrswert) at the time of division.¹ Market value means the price the house would fetch on the open market today. What does not count is the tax value from the tax return, or the price your parents once paid. The tax value is a different figure and, for property, is usually lower.⁷

If the siblings cannot agree on the value, officially appointed experts assess it.¹ You are also free to agree on a different value.¹ If it is below market value, however, the tax office can treat the difference as a gift between siblings.⁷ More on this further down.

The law does not require an independent valuation. But it gives all siblings the same starting point. And you can show the tax office how the agreed value was reached.

What this means for you: before you talk about money, you need a figure everyone can follow. A family value plucked from thin air can turn out expensive.

On death, the parents’ debts become debts of all the heirs. For the mortgage, all are jointly and severally liable.¹ So the bank can claim the full amount from any one sibling.

If one sibling takes over the house, between the siblings they also carry the mortgage.¹ Towards the bank, the others are not yet released. That needs the bank’s consent to the transfer of the debt (Schuldübernahme).² For mortgaged houses a special rule applies. As a rule, the land registry informs the bank of the takeover. If the bank does not declare in writing within one year that it wishes to keep the previous debtors, they are released.^{1 2}

Otherwise the siblings who were paid out remain liable, usually for up to five years after the division. If the mortgage falls due later, the five years run from then.¹ The division agreement alone does not change this.

What this means for you: talk to the bank before the division agreement is signed. And get its answer in writing.

It does not need to be publicly notarised. The division agreement (Teilungsvertrag) is the contract by which the heirs share out the estate. It must be in writing, even if a house is part of it.¹ The land registry, too, only requires a written agreement or the written consent of all heirs.³

For evidential reasons, however, the land registry generally wants certified signatures.⁴ Certifying means an official confirms that the signature is genuine. That is less than notarising the whole contract. You submit the agreement, stating the value of the items allocated, and an application to the land registry.⁴ The competent notary’s office helps with drafting it.

A sale to an outside buyer is different. That sale contract must be publicly notarised.¹

What this means for you: in writing, with certified signatures. Before that, the heirs themselves must be in the land register. That takes the certificate of inheritance.^{1 4} How to get it is shown on the page on clearing your parents’ house.

Then the other siblings are giving money to the one taking over. The tax office can tax this difference as a cross-gift (Querschenkung), a gift between heirs.⁷ Children are exempt from inheritance tax in the Canton of Zurich.⁶ That exemption does not cover a gift between siblings.

An example using the figures above: the three agree on CHF 1,200,000 instead of CHF 1,500,000. A and C each receive CHF 100,000 less. That makes two gifts to B, of CHF 100,000 each.

For each sibling making a gift, CHF 15,000 is tax-free.⁶ The basic rate applies to the rest, multiplied by three for siblings.⁶ B, as the recipient, owes the tax. A and C are jointly and severally liable.⁶ B must file a gift tax return within three months.⁶

What this means for you: a family discount is allowed. Above the allowance, however, it costs tax. Work it out before anyone signs.

Then nobody can decide alone. Until the division, the house belongs to all heirs jointly, as joint ownership (Gesamteigentum). Decisions require unanimity.¹ This is what people often mean when they say an inherited house cannot be sold. It is not a ban. It simply takes everyone.

If someone blocks, any sibling can apply for a representative of the joint heirs.¹ This is handled by the single judge (Einzelgericht) at the district court where the deceased parent last lived.^{9 10} In addition, any heir can demand division at any time, in court if need be.¹

The law wants a house not to be split up but allocated to one heir.¹ If the heirs cannot agree who receives it, however, it must be sold and the proceeds divided.¹ If one heir demands it, the sale takes place by auction, public or among the heirs only.¹

What this means for you: whoever wants to take over needs everyone’s consent. Without it, a sale looms, possibly to strangers.