If the donor retains a right of usufruct, they may continue to use or rent out the property and keep the income, even though ownership has already transferred to the recipient.
The capitalized value of the usufruct is calculated using the official mortality tables and a fixed multiplier, and it correspondingly reduces the taxable basis for gift tax purposes.
The younger the beneficiary of the usufruct and the higher the achievable rent, the greater the capitalized value and thus the tax relief for the recipient.
A legal distinction must be made between reserved usufruct, in which the donor retains the right for themselves, and usufruct granted to a third party, in which a third party is the beneficiary – both affect the valuation differently.
The capitalized value is calculated in accordance with § 14 BewG using a multiplier derived from the official mortality tables, which is multiplied by the annual value of use, resulting in the tax-deductible amount.
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