MYHOME REAL ESTATE - THE ORIGINAL SINCE 2014
When older homeowners transfer their homes to their children or relatives during their lifetime, they often ask for something in return: care and support in their old age. This transfer agreement with a care obligation is a tried-and-true tool in Schwabach and throughout the rural areas of the Nuremberg metropolitan region-provided it is properly drafted by a notary. Flawed contracts can become a trap in the event of a need for care and lead to significant legal and financial problems for both the transferor and the transferee.
The transfer agreement is not a pure gift-it is a mixed contract: On the one hand, the property is transferred (Section 311b of the German Civil Code [BGB], subject to notarization); on the other hand, consideration is agreed upon in the form of a care obligation. Legally, this constitutes a mixed gift with a consideration element.
The care obligation can take various forms: personal care services (cooking, driving, accompanying the recipient to appointments), in-home care in the event of a need for care, financial support (pocket money, payment of nursing home costs up to a certain amount), or a combination thereof. The more specific and quantifiable the obligation, the more secure the contractual structure and the clearer the tax treatment.
Section 528 of the German Civil Code (BGB) is central in this context: The donor may reclaim the gift if the donee breaches the maintenance obligations owed to the donor. In a transfer agreement with a care obligation, this right of reclamation is the transferor’s primary security instrument.
Under § 93 SGB XII, the social welfare office may assume this right of recovery if the transferor applies for social assistance. This means: Even if the transferor does not file a lawsuit themselves, the state can reclaim the property if the transferee refuses to provide care.
| Care Level / Type of Service | Annual Value (Guideline value) | Capitalization factor (age 75) | Present value |
|---|---|---|---|
| Home care (cooking, housekeeping) | approx. €6,000-9,600 | ~8.5 | €51,000-81,600 |
| Care allowance, Care Level 2 (out-of-pocket cost) | approx. €7,800 | ~8.5 | €66,300 |
| Care allowance, Care Level 4 (out-of-pocket cost for nursing home) | approx. €18,000-24,000 | ~8.5 | €153,000-204,000 |
| Lump-sum cash benefit (€500 monthly) | €6,000 | ~8.5 | €51,000 |
| Value of right of residence (base rent €1,000/month) | €12,000 | ~8.5 | €102,000 |
Source: BGB §§ 311b, 516, 528; BewG § 14; ErbStG § 7; GNotKG; Bavarian Justice Portal; Bavarian Care Statistics 2025/2026, as of Q1/Q2 2026.
For a property in Schwabach with a market value of 380,000 euros and an agreed care obligation with a capital value of 80,000 euros, the gift tax base is reduced to just 300,000 euros-below the child allowance of 400,000 euros. The gift tax is therefore zero. Without a care obligation, a gift with a right of residence (present value, e.g., €90,000) would have a base of €290,000-a similar result, but a different risk structure.
In practice, notaries in the Middle Franconia notarial district recommend the following contractual elements for transfer agreements with a care obligation.
Clear description of the care obligation: What services is the transferee obligated to provide? From what care level? Does the obligation also apply in the event of a move to a nursing home? Workable formulations: “Home care up to care level 3; from care level 4, assumption of the personal contribution to the nursing home up to the amount of the local standard care rate in Schwabach.” Without a clear definition, the care obligation is prone to dispute.
Right of recovery in case of non-performance: Section 528 of the German Civil Code (BGB) provides a statutory right of recovery in the event of the donor’s urgent need, but only after the donor’s own needs have been met. A contractual right of recovery in the event of a breach of contract goes further and should always be agreed upon-it applies even if the transferee permanently refuses to provide care, without the transferor necessarily being in need.
> A current appraisal of the Schwabach property is necessary to correctly determine the gift value and the consideration in the transfer agreement. The valuation tool from leadmarkt.ch provides a quick starting point for this.
Social Services Protection Clauses: The contract may provide that the right of recovery can also be redeemed for a monthly payment (so-called redemption clause). This gives the transferee an alternative to returning the property if they can no longer or no longer wish to provide care.
Land Registry Protection: The contractually agreed right of recovery can be entered in the land registry as a priority notice of conveyance or a real encumbrance. This also protects the transferor against third parties-in case the child resells or encumbers the property. The Schwabach Land Registry enters such rights upon application by the notary.
In a transfer agreement with a care obligation, the dimension of the statutory share must be taken into account. To the extent that the care obligation constitutes genuine consideration, the agreement is not a pure gift agreement-and the claims for a statutory share supplement by other heirs (Section 2325 of the German Civil Code) apply only to the gifted portion.
The gift portion is calculated as the difference between the property value and the present value of the care obligation. If a house is worth 380,000 euros and the care obligation has a present value of 80,000 euros, the gift portion is 300,000 euros. This is subject to the 10-year period.
This offers an advantage compared to a pure gift: The amount relevant for the compulsory portion is lower, and the 10-year period begins correspondingly earlier (according to the opinion of many courts, upon completion of the transfer if the consideration is provided immediately).
Schwabach, known as the “gold-beating town,” has a strong tradition of craftsmanship and small and medium-sized businesses. Many owners possess homes in quiet neighborhoods such as Limbach, Wolkersdorf, or Meinhardshof, which have been in family hands for generations. Home care in one’s own property is deeply rooted in the local culture here-which makes transfer agreements with care obligations a standard tool in estate planning.
The care infrastructure in Schwabach includes several outpatient care services and inpatient facilities. This is relevant for drafting contracts: What exactly does care cost in Schwabach? The local standard care rates serve as the benchmark for contractual performance obligations.
The Schwabach Local Court, acting as the probate court, and the relevant land registry office serve Schwabach. Claims for the statutory share or disputes over rights of recovery are heard by the Nuremberg-Fürth Regional Court.
A transfer agreement is not always the best solution. Possible alternatives:
Gift with reservation of usufruct: Instead of a care obligation, the transferor retains a usufruct (right of use including rental income). They continue to live there or rent it out and collect the rent. This secures their financial situation without imposing a personal care obligation on the child.
Gift with right of residence: Similar to usufruct, but without the right to rent out the property. The transferor continues to live there, while the child assumes administrative responsibility.
Gradual gifting: Shares are transferred over several years, each time within the limits of the tax-exempt allowances. This allows gift tax and risks related to the statutory share to be gradually minimized.
The transfer agreement with a care obligation is a proven tool-but only if it is carefully drafted. A clear definition of the care obligation, a strong right of recovery, and registration in the land registry are indispensable. The care obligation reduces gift tax and the basis for the statutory share-a genuine tax advantage that rewards careful planning.
A current valuation is recommended before the notary appointment. The valuation tool from leadmarkt.ch quickly provides a reliable estimate for properties in Schwabach-serving as the basis for contract drafting, tax calculations, and discussions with the notary.
Scenario 1: Child provides care as agreed. The arrangement works smoothly. Social services have no claim to the property; the transferor lives in their familiar surroundings; the child is the owner. After the transferor’s death, the property passes debt-free to the child-the care obligation ends with death.
Scenario 2: Child moves away and can no longer provide care. Here, the contractual right of recovery applies, provided it was agreed upon. The notary has (ideally) precisely regulated this in the transfer agreement. In practice, families often agree on a settlement: The child pays the transferor a lump sum or finances the nursing home placement.
Scenario 3: Child dies before the transferor. In this case, the property passes to the child’s heirs-the care obligation is personal and does not transfer. Anyone who wants to ensure that care is still provided should agree on a basis for reclamation in this event or suggest long-term care insurance as a safeguard.
Scenario 4: The transferor must move into a nursing home. If home care is no longer sufficient, the child must, according to the contract, cover the nursing home costs (if so agreed). This can result in significant expenses. Well-drafted contracts limit the obligation to pay to a specific monthly maximum amount or establish a base amount drawn from the transferor’s own pension.
In practice, the transfer agreement with a care obligation is often combined with a right of residence (Section 1093 BGB) or usufruct (Section 1030 BGB). This provides the transferor with multi-layered security:
The right of residence secures the right to remain in their own property-regardless of whether the child fulfills the care obligation. Even if a dispute arises, the transferor cannot simply be evicted from their home.
Usufruct goes further and additionally secures rental income if the property is rented out or the transferor no longer uses it themselves. This enables support to be provided from the property’s income even if the child is unable to pay maintenance for other reasons.
The combination of a care obligation, right of residence, and-as a final safety net-a contractual right of recovery forms a three-tiered security system that provides optimal protection for transferors in Schwabach and throughout the entire metropolitan region.
In addition to the reduction in gift tax, the care obligation offers another tax advantage: Under certain circumstances, the child may be able to claim the actual care costs incurred as an extraordinary burden under Section 33 of the German Income Tax Act (EStG)-particularly expenses for care and support services that are not reimbursed.
At the same time, the child can depreciate the property (2% per annum under Section 7(4) of the German Income Tax Act (EStG)) if they rent it out after the transferor’s death. These combined tax advantages make the transfer agreement with a care obligation economically attractive in the long term.
The Schwabach Tax Office reviews transfer agreements to determine whether the agreed-upon care obligation actually has an economic value that adequately compensates for the property’s value. If the care obligation is overvalued to save on gift tax, the tax office may adjust the valuation.
The valuation of a care obligation follows a two-step methodology: First, the annual care value is determined (hourly rate × expected care hours per year), then this annual value is multiplied by a multiplier that depends on the transferor’s statistical life expectancy (Section 14 of the Valuation Act, mortality tables of the Federal Statistical Office). For a 75-year-old transferor and an annual care value of 12,000 euros, a multiplier of, for example, 8.5 results in a total value of the care obligation of 102,000 euros.
If the tax office considers this value to be too high, it may recalculate the gift tax liability accordingly. A realistic, well-documented valuation by a tax advisor or appraiser prior to signing the contract prevents surprises later on and safeguards tax planning.
Prepared by the my-home.de editorial team in collaboration with regional real estate analysts. Data as of: Q1/Q2 2026.
A transfer agreement transfers a property (as a gift) to a child or another person. In return, the recipient agrees to provide care and support for the transferor in their old age. The obligation to provide care is part of the agreement and must be clearly defined.
Yes. A contractually agreed obligation to provide care is a consideration that reduces the gift tax value. The tax office assesses the obligation to provide care based on its present value (Section 14 of the German Valuation Act [BewG], annual value × multiplier). The remaining gift tax value serves as the tax base.
The transfer agreement should include a provision granting the transferor the right to reclaim the property in the event that the obligation to provide care is permanently breached. Without such a provision, the transfer agreement remains valid, but the transferee is liable for damages. The wording used by the notary is crucial in this regard.
Yes, under certain circumstances. If the recipient of the transfer fails to provide care and the transferor is forced to apply for public assistance, the social welfare office may assume the transferor’s right to reclaim the property under § 528 of the German Civil Code (BGB) (§ 93 of Book XII of the Social Code) and reclaim the property.
If the obligation to provide care constitutes genuine consideration (rather than being purely a gift), the transfer is considered, in part, to be a transfer for consideration. This reduces the claim for a supplement to the statutory share. The remaining gift relevant to the statutory share is subject to the 10-year limitation period under § 2325 of the German Civil Code (BGB).
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Content researched and verified by the my-home.de expert network - specialized in real estate sales, valuation, and market analysis in Nuremberg, Fürth, Erlangen, Schwabach, and Roth.
Note on content
This guide article serves as general information about the real estate market in Nuremberg and the surrounding region. It does not replace individual tax advice, legal advice, or expert valuation in specific cases. For binding information, please contact a tax advisor, attorney, or certified appraiser.
Market data, prices, and statutory provisions may change at short notice. Despite careful research, we assume no liability for the accuracy, completeness, or timeliness of the content.
Article as of March 4, 2026
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