Control when selling an apartment building

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• Control when selling an apartment building

Which taxes apply when selling an apartment building?

Selling an apartment building can be associated with significant tax payments. At a glance:

Speculation tax on an apartment building

Also for multi-family homes, the 10-year speculation period (§ 23 EStG) applies. The period begins with the notarized purchase contract. Decisive:

• After 10 years: Capital gain from sale fully tax-free (private individual)
• Under 10 years: The prize is taxed at the personal income tax rate
• Self-Occupancy: For MFH, the 3-year self-occupancy rule applies only to the unit occupied by the owner, not to the entire building.
• Exemption: 600 € per year (§ 23 Abs. 3 EStG) – usually not relevant for MFH sales

Calculation of the capital gain

Formel: Selling price − purchase costs − additional costs − depreciation (depreciation Real Estate Depreciation: Depreciation & Rates) + taxable depreciation amounts

Important: Depreciation already deducted (AfA) is added back to the taxable profit upon sale (AfA recalculation). This significantly increases the effective tax burden.

Commercial Tax: When Does It Apply?

Private individuals who hold real estate as an investment generally pay no commercial tax. The situation becomes risky with the so-called Three-Property Threshold:

• Anyone who buys and sells more than three properties within five years is considered a commercial real estate dealer
• Consequence: All profits – even retroactively – become subject to commercial tax
• Commercial tax: approximately 15 % corporate tax + local surcharge (effectively 30–40 %)
• The 10-year speculation exemption is lost in commercial trading!

Solution: Hold each property for longer than five years or structure ownership through separate GmbHs/holding structures.

Asset Deal vs. Share Deal in the Sale of MFHs

When selling larger multi-family homes owned by a company, there are two sale structures:

Saving taxes: Strategies for MFH sellers

• Wait 10 years: For privately held MFH the simplest way to achieve tax exemption
• Sell in a bad income year: For example, after retirement or in a loss year
• Offset losses: Losses from other property sales in the same year reduce the profit
• Transfer to children before sale: Gift to children in a lower tax class (observe holding periods!)
• Limited liability company structure: MFHs sold within the GmbH structure are subject to only 1.5 % effective tax when retained (§ 8b KStG) — complex structure, tax advisor necessary
• 1031-Exchange Analogue (DE: Reinvestment): No direct equivalent, but tax advisors can delay the tax burden through clever reinvestment planning

MFH Inheritance: Taxes when selling an inherited apartment building

If an apartment building is inherited and then sold, special rules apply:

• The speculation period starts from the deceased’s purchase date – not from the inheritance
• If the deceased bought the MFH more than 10 years ago: Sale after inheritance is tax-free
• If the deceased lived in the MFH themselves (only one unit): The 3-year rule applies to this unit
• Inheritance tax and speculation tax can apply simultaneously – independent of each other
• Exemptions for inheritance tax: 400,000 € (children), 500,000 € (spouse)

Bonitätsprüfung: Definition & Vorgang

Bei einer Bonitätsprüfung wird geprüft, ob der Kaufinteressent sich auch die inserierte Immobilie leisten kann. Das ist einer der wichtigsten Schritte des Immobilienverkaufs und gilt zum Schutz des Verkäufers.

Persönliche & wirtschaftliche Bonität: Erklärung

Unterschieden wird hierbei zwischen der wirtschaftlichen Bonität und der persönlichen Bonität. Die meisten Immobilienkäufer bringen zwar Eigenkapital mit, nehmen für den Kauf der Immobilie aber auch einen Kredit oder ein Darlehen auf. Bei der wirtschaftlichen Kreditwürdigkeit geht es darum, ob ein Kaufinteressent überhaupt in der Lage wäre, dieses Darlehen oder den Kredit wieder an die Bank zurück zu zahlen. Die persönliche Kreditwürdigkeit wird danach definiert, wie bereit ein Kaufinteressent ist, eine solche Finanzierung auch wirklich auf zu nehmen.

Unterschieden wird zwischen:

• Wirtschaftliche Bonität
• Persönliche Bonität

Verfahren: Schufa Selbstauskunft, Kontoauszüge & Co.

Wie liquide ein Käufer ist, können Sie unterschiedlich herausfinden. Wir empfehlen immer die Schufa Selbstauskunft. Der Käufer beantragt die eigene Bonitätsprüfung, die dann an Sie als Verkäufer weiter geleitet wird. Die Vorteile: Sie müssen sich selbst nicht um zu viel kümmern und bauen somit direkt ein Vertrauensverhältnis zum Kaufinteressenten auf – ein Win-Win für beide. Handelt es sich um eine außergewöhnlich hohe Summe, können Sie sich auch Konto- und Depotauszüge geben lassen. Wie viel Geld hat der Käufer auf seinem Konto? Und wie viele Wertpapiere liegen vor? Diese Details können Sie hier einsehen.

Die Verfahren stehen Ihnen zur Verfügung:

• Schufa Selbstauskunft
• Kontoauszüge & Wertpapiere
• Finanzierungszusage der Bank

Wohnung vs. Villa: Kreditwürdigkeit prüfen

Wie detailreich Sie diese Bonitätsprüfung durchführen, hängt vom Haustyp und Immobilientyp Ihres Objekts ab. Je gehobener die Liegenschaft, desto höher der Kaufpreis. Und je höher der Kaufpreis, um so wichtiger auch die Bonitätsprüfung. Zu oft springen Käufer kurz vor Unterzeichnung des Kaufvertrags ab. Und wer muss dann den Notar zahlen? Wenn nicht anders vereinbart, dann Sie selbst. Das sollten Sie unbedingt vermeiden.

Umso höher der Kaufpreis, desto wichtiger die Kreditwürdigkeit des Käufers

Möchten Sie Ihre Eigentumswohnung verkaufen oder ein komplettes Haus? Schauen wir uns beide Fälle genauer an:

Bonität prüfen bei Wohnungsverkauf

Für die relativ gängige Eigentumswohnung genügt in der Regel ein schriftlicher Verkehr oder ein kurzes Telefonat, mit den Interessenten, um durch Erfahrung abzuschätzen, ob die nötigen finanziellen Sicherheiten gegeben sind.

Oft reicht bereits ein kurzes Telefonat!

Bonität prüfen bei Haus & Villa

Handelt es sich aber um eine Stadtvilla, zum Beispiel mit zusätzlichem Interieur im Wert von 8 Millionen Euro, müssen schon die Besichtigungstermine, bzw. die Personen, die hierzu eingeladen werden, genau geprüft werden. Hier geht es nicht nur um die Einrichtung der Immobilie, sondern auch um Kunstwerke und andere kleine Schätze und Vermögensgegenstände. Selbst ein versehentliches Zerkratzen eines Gemäldes kann dann schnell unangenehme Folgen haben.

Je luxuriöser das Objekt, desto umfangreicher die Bonitätsprüfung

Bonitätsprüfungen für Luxusimmobilien sind deshalb auch etwas umfangreicher. Hier geht es nicht um Lohnnachweise, sondern in der Regel um Asset-Nachweise, also Vermögensnachweise. Doch das würde an dieser Stelle zu weit führen.

Was bedeutet Bonität Kreditwürdigkeit? Wie können Sie Ihre Kreditwürdigkeit erfahren? Stichwort, Schufa-Selbstauskunft. Lesen Sie hier mehr zum Thema:

• Bonität: Einfach erklärt

Nach der Interessenten-Filterung und der Prüfung der Kreditwürdigkeit, werden die ersten Besichtigungstermine vom Immobilienmakler vereinbart.

Weiter zu Schritt 11: Besichtigungstermine organisieren & durchführen

Ein Besichtigungstermin muss gewissenhaft vorbereitet werden. Schließlich entscheidet sich hier oft, wer wirklich Interesse an Ihrem Objekt hat und wer als Käufer wegfällt. Je besser die Planung und Durchführung der Besichtigung, um so attraktiver auch Ihre Immobilie.

• Besichtigungstermine organisieren und durchführen

Zurück zu Schritt 9: Kaufinteressenten filtern und auswählen

Die Immobilie wurde inseriert und die Anfragen durchgesichtet. Woher wissen Sie nun, welcher Kaufinteressent am Besten passt? Mehr dazu hier.

• Kaufinteressenten filtern und auswählen

Service costs: definition and explanation

Tanto si se trata de una propiedad de rendimiento como de una inversión, al comprar una casa o un piso siempre hay costes de compra auxiliares. Lo que muchos subestiman: Los costes auxiliares continuos que conlleva la propiedad de un inmueble. Si va a comprar una vivienda alquilada o la alquila por primera vez, puede repercutir en el inquilino algunos de estos gastos accesorios.

Non-proratable auxiliary costs: Repair, maintenance & Co.

You cannot pass on the costs of craftsmen, maintenance and administration to the tenant. After all, it is your responsibility as the landlord to ensure that the property meets modern safety standards and is rentable.

As a landlord, you are responsible for these costs:

• Repair costs
• Maintenance costs
• Administrative expenses
• Banking fees

Proratable service costs: The tenant pays

Proratable ancillary costs are those that you, as the landlord, can allocate per square meter. To avoid misunderstandings, they must be agreed upon in the rental agreement. This type of incidental costs are also known as operating costs. Let’s take a closer look.

List of operating costs: (BetrKV) § 2

Operating costs are therefore constant public charges on the property. They are defined and regulated by law. Thus, all costs for the care and maintenance of common areas and facilities fall into the category of proratable service costs. Street cleaning, waste removal, and chimney sweeping are also the tenant’s responsibility.

Here is a brief summary:

1. Water supply
2. Drainage
3. Heating system and fuels
4. Hot water system, supply and appliances
5. Connected heating and hot water supply systems
6. Passenger or freight elevator
7. Street cleaning and waste removal
8. Building cleaning and pest control
9. Garden maintenance
10. Lighting
11. Chimney cleaning
12. Property and liability insurance
13. Caregiver
14. Community antenna system
15. Laundry care facilities
16. Other operating expenses

More information about buying a property: Operating costs

Are you buying a property that is already rented out or do you plan to rent out the one you’ve just acquired? If you’ve never rented out a real estate property before, you should carefully examine the various service costs. Read more about this topic here, on my new buyer’s site, Immobilien-Erfahrung.de:

• Distribution of operating costs to tenants (external)

Commercial test: Calculate purchase price

So, if you have found a property that you like, you should check it in advance. For this, you proceed in two steps:

1. Commercial examination
2. Technical test

To calculate the purchase price, you should write down all negative points in advance. You will need these not only for the purchase price calculation, but also for the later purchase price negotiations with the seller. These are the important, general points that come up in every commercial examination of a property.

Rental agreement, rent arrears and reduction

If you are purchasing an unrented property for your own use, these points are less important to you. However, if your property is still rented or if you want to purchase it as an investment, you should make a note not only of the deposit, but also of any special features and individual agreements in the rental contracts.

• Can all ongoing operating costs be apportioned to the tenants?
• Is there a deposit that has been agreed upon?
• What special features were agreed in the lease agreements?

Rent reductions and increases are also important for the commercial audit and should be noted for this purpose.

Non-apportionable operating costs: checklist

Some operating costs can be passed on to your tenants, but some cannot. In particular, costs for property management and maintenance, as well as depreciation, must always be borne by the landlord.

Are there any non-apportionable costs?

Here are a few examples:

• Costs for property management
• Maintenance costs
• Costs for repair
• Depreciation
• Reserves

In particular, renovation and refurbishment measures that serve to maintain the property cannot be passed on to the tenant.

Maintenance: Housing arrears & upcoming refurbishments

Maintenance is also an important criterion in the commercial audit. For this purpose, we recommend that you check the maintenance reserve on the basis of the last utility bill by asking for the last utility bill. Calculate a typical average of 1 euro +/- 20 cents per square meter. You will find upcoming renovation and modernization measures in the collection of resolutions.

So this is something you should definitely pay attention to:

• Amount of the maintenance reserve
• Amount of existing house money arrears
• Examination of the collection of resolutions

Checklist: Commercial audit

Here, once again summarized, the – typical – 11 test points in short form:

1. Can you pass on all current operating costs to your tenant(s)?
2. Has a deposit been agreed?
3. Are there any special features in the lease agreements?
4. Are there currently any outstanding rent arrears?
5. Are there any active rent abatements?
6. When were the last rent increases implemented?
7. How much rent could be achieved on new leases?
8. Do you expect to incur non-apportionable costs?
9. How much is the maintenance reserve of the WEG?
10. Are there any house money arrears of the WEG?
11. Have you reviewed the collection of resolutions?

Tip. Buying real estate: Learning from A-Z

Everything from A-Z: owner-occupancy or renting, financing a condominium, apartment search, real estate portals, brokers, valuation, purchase prices, negotiations and taxes. Knowledge and experience from experts, in one guide.

✓ A guidebook
✓ All facts
✓ Insider tips
✓ Purchase checklists

Learn step-by-step the home buying process and lots of insider tips!

• Buy apartment

Determine maximum purchase price: Important factors

One of the most important steps in the purchase of a property, which is often underestimated, is the determination of the maximum purchase price of the property. In order to avoid unwanted surprises here, it is important to determine this before you start looking for a property. This usually involves sitting down with your bank advisor and going over your finances. You then show a certain amount of equity and the bank then gives you a corresponding loan. The amount of this loan depends on your creditworthiness (for this you have to submit a self-disclosure ), as well as on your equity to be presented. The loan-to-value ratio of the property and the monthly charge are also taken into account.

Equity X + Bank loan Y

These are the factors that matter:

• Credit rating
• Mortgage lending value of the object
• Available equity
• Monthly load

Let’s now go through the individual factors in a little more detail:

Credit rating: assets vs. liabilities

When your credit rating is checked, your assets and liabilities are mentioned and compared. If the balance is positive, i.e. your assets outweigh your expenses and liabilities, your chances of getting a loan are very good. And the higher this credit rating, the lower your equity investment. After all, the bank also wants your money back as soon as possible and wants to be sure to get it.

Assets are matched with liabilities

Mortgage lending value of the property: market value & fair market value

The mortgage lending value of the property is generally lower than the market value. The market value is the selling price of the house or apartment if it were sold at the present time. Therefore, the market value is also called ‘theoretical market value’. The mortgage lending value is on average 20% below this. In order to minimize the risk of loan default, banks base their lending decisions on the mortgage lending value and not on the market value.

Mortgage lending value = market value – 20%

Available equity: Dependence on the balance sheet

As a general rule, 20% equity capital is needed. As mentioned before, the exact amount of equity ultimately depends on your credit rating. The more positive your balance sheet, the less equity you have to show. So you can also invest with an equity of 10% or 15% already in a property.

The better the credit rating, the less equity capital

Monthly load: income & expenses

The last important factor that influences the financing and thus the maximum purchase price is your monthly burden. Similar to the credit check, income and expenses are compared here. This is important for the bank, as it allows them to set the conditions for repayment, interest and redemption.

Conclusion: Determine maximum purchase price & financing

So, in addition to your credit rating and available equity, your monthly financing and loan-to-value also matter. This way, you can not only determine the maximum purchase price before you start looking for real estate, but also determine the terms for repaying your loan.

Buying real estate: Learning from A-Z

If you want to learn even more about the maximum purchase price, stop by our guide:

• Purchase price height (external)

â A guide â all the facts â insider tips â buying checklists to the questions that real estate newcomers have when buying the apartment: Owner-occupancy or rental, financing a condo, apartment hunting, real estate portals, realtors, appraisal, purchase prices, negotiations and taxes. Knowledge and experience from experts, in one guide. Learn step by step the process of buying an apartment and many insider tips!

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