Share deal in real estate: sell company "instead" of property - save taxes

Share deals – saving taxes, but the right way? In my guide to selling a multi-family home for tax purposes, I have just given a short, simple explanation of the share deal, with an example calculation. Instead of 382,000 euros in taxes, only 1,540 euros! How does that work? Here is an insight into asset deals and share deals. You will quickly recognize the advantage and why professional investors work with holding structures.

Key Facts -

Only 1.54% tax on real estate sales

Sale of a property as a company 🡆 Asset deal

Sale of a real estate GmbH as a company 🡆 Share deal

Bonus! No land transfer tax on purchase

Real estate & tax coaching

Only 1.54% tax on real estate sales

One option for a tax-optimized sale is the share deal. In this case, however, the property must already have been purchased by a company (such as Immobilien GmbH) (not as an individual). A share deal is possible if you have the company in a holding structure. This means you only pay 1.54% tax due to the intercompany privilege (§ 8b KStG).

Asset deal = property is sold
Share deal = company is sold (with real estate ownership)

Here is the construct for a share deal in a holding company:

Now let’s calculate our example again, starting with the direct sale of a property!

Sale of a property as a company 🡆 Asset deal

Let’s calculate the exemplary tax in Berlin for the sale of a property as a company (asset deal).

Purchase 2024 = 2,100,000 euros
Sale in 2028 = 4,100,000 euros
Taxable profit Berlin approx. 19.1 % (trade tax 4.1 %, corporation tax 15 %) = EUR 2,000,000
At 19.1 % = 382,000 euros

Sale of a real estate GmbH as a company 🡆 Share deal

Here is a comparison of the tax burden for the sale of a real estate GmbH as a company in Berlin (share deal):

Purchase 2024 = 2,100,000 euros
Sale in 2028 = 3,100,000 euros
Taxable profit = 1,000,000 euros
For GmbH 1.54 % = 1,540 euros

You can see how huge the difference is.

Bonus! No land transfer tax on purchase

Let’s delve a little deeper into the subject of real estate and tax optimization!

Again, simply put:

Sale of Immobilien GmbH below 89% = no real estate transfer tax

Why is this the case? In Germany, the sale of shares in a GmbH that owns real estate is not normally subject to real estate transfer tax as long as the shares are below a certain percentage(§ 5 GrEStG).

What are the advantages? Real estate as an investment must bring a profit, usually calculated by the rental yield. The land transfer tax increases the purchase price by up to 6.5%, depending on the federal state. For 1 million euros, this is a cost of 65,000 euros. This directly increases the yield by a few percent.

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