Not every usufruct has to be lifelong. Sometimes it is only meant to last until a loan is repaid or the children come of age. In addition, there is a limit that caps the annual value regardless of the term. Both have a direct effect on the capital value and therefore on German gift tax.
Fixed-term uses under § 13 BewG
Uses for a fixed period fall under § 13(1) BewG. The capital value is the annual value times the multiplier from Annex 9a to the Valuation Act. These values are also calculated at 5.5 percent interest as the average of payments in advance and in arrears. Some examples:
1. 5 years: 4.388
2. 10 years: 7.745
3. 15 years: 10.314
4. 20 years: 12.279
5. 30 years: 14.933
6. more than 101 years: 18.600
No more than the lifelong value
A natural person's usufruct or right of residence ends at the latest on their death. A ten-year usufruct is therefore really a right for ten years, but no longer than until death. For such cases, § 13(1) sentence 2 BewG provides that the capital value may not exceed the value under § 14 BewG.
Example: an 88-year-old man reserves a usufruct for ten years. Annex 9a would give a multiplier of 7.745. However, the lifelong multiplier for an 88-year-old man from 2026 is only 3.778. The lower value applies. For a 65-year-old woman it is the other way round: ten years give 7.745, lifelong would be 12.583. Here the Annex 9a value applies.
The cap under § 16 BewG
Regardless of the term, § 16 BewG limits the annual value. It may be at most the property's value under the Valuation Act divided by 18.6. The divisor corresponds to the multiplier for a perpetual use. The rule ensures that a right of use is never worth more than the property itself.
Example: an apartment building has a property tax value of €250,000 and yields €24,000 net rent per year. The maximum is €250,000 ÷ 18.6 = €13,441. For a 62-year-old man with a multiplier of 12.272, the capital value is about €164,946 instead of the arithmetical €294,528.
When does a fixed term make sense?
A fixed-term usufruct has a smaller capital value than a lifelong one as long as the term is well below the statistical remaining life expectancy. The gift tax deduction is then smaller. In return, the recipient gains full use sooner. A fixed term can make sense if the parents only want to secure their retirement income for a transitional period or if a loan is to be repaid. You can model how financing develops over the term with the Mortgage Calculator.
Practical tips
1. State clearly in the contract whether the right is fixed-term, lifelong or both.
2. Check both options with the calculator, because the smaller multiplier wins.
3. Keep the cap in mind if rents are high relative to the tax value.
Conclusion
Annex 9a, the limit to the lifelong value and the cap under § 16 BewG work together. In the Usufruct Value Calculator, simply select the fixed-term option and you will see immediately which multiplier applies and whether the annual value is capped. The calculation does not replace tax advice.