Since the inheritance tax value is based on standardized factors, it cannot reflect property-specific particularities such as renovation needs, unusual plot shapes, or contamination.
The market value, on the other hand, takes into account all individual characteristics of the property and corresponds to the price that could realistically be achieved in a sale.
If the two values deviate significantly from each other, it is often worthwhile to obtain an appraisal report in order to have the inheritance tax calculated on the basis of the actual, lower market value.
This distinction also has practical implications: if the heirs later sell the property, the calculation of any potential speculation tax under § 23 EStG (German Income Tax Act) is based not on the inheritance tax value, but on the original acquisition value of the deceased.
If the inheritance tax value and the actual sale price achieved differ significantly, this can also be a subsequent indication that the tax value originally applied should have been corrected.
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