Zuwendungsnießbrauch in favour of child for rented out apartment

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I am going to soon make an appointment with a Notar to draw up a Zuwendungsnießbrauch. I intend funnelling 50% of the rent from one property to my 8 year old son until he is 18 years old, perhaps a little older. I will probably gift him the entire property itself but I'm not yet comfortable doing that so for now it's the Zuwendungsnießbrauch.

 

On this site the Steuerberaterin claims that these things don't need to be entered into the Grundbuch, but elsewhere I have read that they do if they are concerning real estate:

https://www.steuerberaterin-muenchen.com/zuwendungsnie%C3%9Fbrauch.html

 

Quote

Wie immer bei Verträgen unter nahen Angehörigen sind diese schriftlich zu fassen. Die Eintragung des Zuwendungsnießbrauchs ist zwar nicht im Grundbuch vorzunehmen, jedoch müssen die Mieter informiert werden. Außerdem sind die Verträge auch tatsächlich umzusetzten, die Miete muss daher auf ein Konto des Kindes gutgeschrieben werden.

 

Does anyone know if this is correct?

 

 

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The English term for Nießbrauch is usufruct.

Now please read §311b (3) BGB: https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p1023

  • (3) A contract by which one party agrees to transfer his present property or a fraction of his present property or to charge it with a usufruct must be recorded by a notary.

You can also read up on it here: https://www.juraforum.de/lexikon/niessbrauch

  • The establishment of usufruct for immovable property is not expressly regulated. However, the establishment of a right requires the form of the transaction that would be required for the transfer of the underlying object on which this right is established (in the case of land, the form of § 311b BGB). Therefore, agreement and entry in the land register (§§ 873 f., 925 BGB) are required

--> the Nießbrauch (usufruct) has to be entered in the Grundbuch.

 

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Please note that in a Zuwendungsnießbrauch, your son cannot use the depreciation on the "building part" of the flat to lower his rental profit, since only the owner (= you) is allowed to do so

--> his half of the rental profit will be higher than yours

 

You do know that since your son is a minor, the family court has to approve this?

They may even appoint an Ergänzungspfleger.

Please read Randziffern 4 and 5 in the BMF-Schreiben v. 30.09.2013: https://datenbank.nwb.de/Dokument/477411/

  • 4 If parents grant their minor children usufruct of a property, the involvement of a guardian is generally required because the legal obligation between owner and usufructuary regularly associated with the usufruct establishes not only rights but also obligations of the usufructuary and the usufructuary therefore does not merely obtain a legal advantage (BFH ruling of 13 May 1980 - BStBl 1981 II p. 297). In particular, the usufructuary's entry into the landlord's position is to be regarded as legally disadvantageous in this respect. Therefore, even in cases of gross usufruct (marg. no. 14), the cooperation of the supplementary guardian is required if the usufructuary is to enter into existing tenancies or be obliged to rent. The arrangement of a supplementary guardianship is only required for the appointment, not for the duration of the usufruct (BFH ruling of 13 May 1980 - BStBl 1981 II p. 295).
  • 5 However, the appointment of the usufruct without the involvement of a supplementary guardian is to be recognised for income tax purposes in these cases if the family court has deemed the involvement of a supplementary guardian to be dispensable.
     

and §1643 BGB: https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p5787

 

If you skip this "family court" step, the Finanzamt will simply ignore the Nießbrauch and continue to tax the rental profit in your tax return, it happened to this family: https://www-bfh-simons--moll-de.translate.goog/bfh_1981/XX810297.HTM?_x_tr_sch=http&_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-GB&_x_tr_pto=ajax,nv,elem

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Thanks for confirming my suspicion that that page was incorrect and that the usufruct (what a strange word that is) will need to be entered into the Grundbuch. That's really helpful.

 

I was also aware that the family court will have to be involved and essentially approve what I want to do. I hope that doesn't drive the costs up too much but it's definitely worth doing in our particular constellation. The AfA is relatively small thankfully. I won't be losing much there. 

 

Will the Notar engage the family court "by default" or do I need to expressly request that?

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56 minutes ago, murphaph said:

 the usufruct (what a strange word that is) 

 

The word "usufruct" comes from Latin and basically means to "use the fruit", so if someone gives you the usufruct of an orchard, you are allowed to harvest and sell the fruit, but you are not allowed to chop down the fruit trees or to sell the land.

 

See here: https://en.wikipedia.org/wiki/Usufruct

  • Usus (use) is the right to use or enjoy a thing possessed, directly and without altering it.
  • Fructus (fruit, in a figurative sense) is the right to derive profit from a thing possessed: for instance, by selling crops, leasing immovables or annexed movables, taxing for entry, and so on.

 

56 minutes ago, murphaph said:

Will the Notar engage the family court "by default" or do I need to expressly request that?

 

You need to do it yourself, but you can simply tell the employee of the family court (= Rechtspfleger) what you need and he will formulate it in a fitting manner, you don't need a lawyer for this.

 

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Thanks again Panda, so the steps are in order:

1. Go to the Notar, have the contract drawn up, sign it and have it notarised,

2. Notar should enter it into the Grundbuch

3. Simultaneously I should go to the family court and have them issue me something to say it's not detrimental for my son?

 

Is that right? I will post my experience here afterwards for anyone else going down this road of course :-)

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I would switch around steps 2 and 3, because the Grundbuchamt will simply refuse to do the Eintragung until they see the approval by the family court, so better have it in hand before you get to the Grundbuch.

 

But your Notar will know that.

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