Taxes on the sale of an apartment building

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• Taxes on the sale of an apartment building

No-person GmbH: The GmbH without shareholders

The Kein-Personen-GmbH – or Kein-Mann-GmbH or Keinmann-GmbH – is a curiosity among German forms of corporate law, because it represents a GmbH that has no shareholders. In the Austrian version of the GmbHG, the acquisition as well as the pledge of own shares by the company is expressly prohibited in section 81 and declared ineffective. In Germany, on the other hand, there is no such restriction, which is why a GmbH there is granted the right, as a legal entity, to acquire its own shares without restriction. Thus, the acquisition of 100 percent of the business shares is also possible.

Causes for a no-man GmbH: inheritance, donation, termination & Co.

But how can there be a GmbH without shareholders? There may be different reasons for all GmbH shares to be owned by the GmbH itself: The GmbH can be registered as heir to the business shares and thus actually be left without a single shareholder in the event of inheritance – in the case of a one-person company or two-person GmbH, such a scenario is easy to imagine. Alternatively, the GmbH can also be given business shares by its shareholders or no shareholders remain in the GmbH on the basis of a caducation – i.e. the forced exclusion of shareholders who are not willing or able to pay and who have defaulted on their capital contribution in accordance with the articles of association.

Further reasons are, for example, the sale of shares to the GmbH; the abandonment – i.e. the relinquishment – of shares by the shareholder(s) in favour of a consideration, usually the release or discharge from existing (payment) obligations; or also the withdrawal of shareholders through ordinary termination.

Possible causes of the emergence of a no-person limited liability company:

• Heritage
• Gift
• Caducation
• Purchase/sale of shares
• Abandon
• Cancellation

Establish a GmbH: Legal form and alternatives

1. One-person GmbH: Solo founder
2. Two-person GmbH: Founder Duo
3. Limited liability company (GmbH)
4. Special case: Real estate GmbH
5. Legal forms: List

One-person GmbH: Solo founder

One-person GmbH – The GmbH model for solo founders! By appointing new shareholders or leaving existing shareholders, the GmbH model you choose can easily change. Whether it’s a one-person company, a two-person limited company or even a company that operates without any shareholders at all…. In each case, there are special features that you should be aware of, as they deviate from the norm of the conventional limited liability company.

• One-person limited liability company

Two-person GmbH: Founder Duo

Two-person GmbH – The GmbH model for founding duos! By appointing new shareholders or leaving existing shareholders, the GmbH model you choose can easily change. Whether it is a one-person company, a two-person GmbH or even a company that operates without any shareholders at all… In each case, there are specifics you should be aware of as they deviate from the norm of the traditional limited liability company.

• Two-person limited liability company

Limited liability company (GmbH)

Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH) – The limited liability company is a German legal form that is founded by at least one person and managed by at least one shareholder. As the name already indicates, this corporate legal form is characterized by a limitation of liability for its shareholder(s).

• Limited liability company (GmbH)

Special case: Real estate GmbH

Immobilien GmbH / Vermögensverwaltende GmbH / Immobiliengesellschaft – In this article you will learn the basics about real estate companies. Who would think of founding a limited liability company when buying a house or a condominium? Admittedly, this makes no sense for owner-occupation, but it does for renting.

• Real estate company

Here you will find all the legal forms that can be chosen as a founder in Germany and a guide with a checklist:

Legal forms: List

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

• Legal forms: List

What happens to the house? Your options when inheriting real estate

If you are the sole heir to a house, you can decide entirely for yourself and according to your wishes. It is possible to move into the inherited property yourself. Renting is also possible if you already own a house and inherit a property that is rentable without major maintenance costs due to its condition.

The third most common procedure with an inherited house is to sell it. Before you decide, you should generally know the market value and whether the property is unencumbered or encumbered with liabilities that you have also inherited. In the case of a house with a land charge, for example, it may be worthwhile to favour the sale and in this way pay off all liabilities to the bank.

Speculation tax on inheritance

You should also consider the tax aspects. More on tax implications: property taxes. If the house was owned by the deceased for less than 10 years, you may be liable for speculation tax. If you use the property yourself, you do not pay this tax. On the other hand, if you sell the property, you will receive a demand for payment from the tax office and must expect the financial burden of the speculation tax to be enormous. If you are a co-heir and the house is to be sold as part of a community of heirs , you need to take note of a few special features.

More information about inheritance:

Inheritance settlement

Properties inherited in community pose a particular difficulty when selling. Within the framework of a community of heirs, there are several owners in the land register. This circumstance has a detrimental effect on the interest of potential buyers and makes the sale process more difficult. There is a solution to simplify the settlement and at the same time provide for a clear guideline of all heirs with equal rights. The settlement of an estate refers to the dissolution of a community of heirs, which is carried out on the basis of clear contractual regulations and is not bound by any particular form. Everything you need to know about inheritance settlement.

Community of heirs

From practice it is known that a community of heirs rather rarely agree. But from the disagreement and open disputes in relation to a real estate inheritance arise losses that you can avoid with prudence. Avoid conflicts about the estate by consulting an estate agent and finding the best way with support. If the will does not provide otherwise, all co-heirs are equally entitled and obliged. This means that a sale is often the best solution and gives you the opportunity to divide the proceeds of the estate between all the co-heirs, thus avoiding the problem of an inheritance dispute. Learn more about the community of heirs.

Inheritance tax

For many heirs, grief, joy and sorrow are closely linked. When you inherit a house, this process is always linked to a painful, emotional loss. After some time, a slight joy spreads and you realize that you are a homeowner. At the same time comes the worry that the tax office will claim inheritance tax from you and you will only be able to pay this amount if you sell the house. You have an exemption amount, below which there is generally no inheritance tax. The amount of this allowance is based on your degree of relationship to the deceased. Spouses can inherit real estate tax-free up to 500,000 euros, children up to 400,000 euros. To ensure that you do not pay speculation tax, you should consider whether you would like to live in the inherited house yourself if it was acquired less than 10 years ago. Everything about inheritance tax.

Statistics on inheritance, inheritance, house and apartment

Further studies and statistics can be found on the websites of the Federal Statistical Office and with us under:

• Real Estate Statistics
• Investment statistics
• Weather statistics

Inheritance and gifts

Here you can see inheritances and gifts in Germany. The survey ranges from 2008 to 2018 and shows that over 110,000 inheritances are distributed each year. Great potential for dispute if the community of heirs does not agree.

You can find more statistics at Statista

How much money is inherited?

Since 2014, Hamburg in particular has been at the top in Germany. Hamburg is currently at the top with 167.80 euros. In no other city is so much inherited. With a population share 2.19% of total Germany (1.82 million out of 82.79 million), a total volume of 305,731,600 euros is inherited annually.

• Population share Hamburg 2.19%
• Inheritance in Germany (comparison year) 109,635; statistically 2,401 inheritances in Hamburg
• Total inheritance (Hamburg / year) 305.731.600 Euro

Selling an inheritance? Apartment prices in Germany

Here you can see the cities with the highest prices per square metre for condominiums comparing 2010 and 2018* (in euros per square metre).

1. Munich (Bavaria) at 8,342 euros per sqm; up from 6,737 euros per sqm in 2014; up 1,695 euros per sqm in 4 years.
2. Stuttgart (Baden-Württemberg) at 5,925 euros per sqm; up from 4744 euros per sqm in 2014; up 1,181 euros per sqm.
3. Frankfurt am Main (Hesse) at €6,060 per sqm; up from €4,373 per sqm in 2014; up €1,687 per sqm
4. Freiburg im Breisgau (Bavaria) at 4,943 euros per sqm; up from 4,740 euros per sqm in 2014; increase of 203 euros per sqm
5. Ingolstadt (Bavaria) at €4,969 per sq m; up from €4,287 per sq m in 2014; increase of €682 per sq m.

Germany in comparison: Inheritance in other countries

Inheritance tax critics: What do Germans think?

What is the opinion of Germans on the subject of inheritance and taxes? The question: “Do you find the argument of the inheritance tax critics that the inherited assets were already taxed during your lifetime justified?”

Uniform inheritance tax – Survey

Should a uniform but low tax rate be introduced for inheritance tax?

You can find more statistics at Statista

Spare the family business – Survey

Should heirs to family businesses continue to be largely spared from taxation in the future?

Reform of inheritance tax and valuation law

Vote of the members of the Bundestag on the draft law for the reform of the inheritance tax and valuation law

Abolish taxation of inheritances

Should the taxation of inheritances be abolished in general?

Against abolition same for increase of inheritance tax?

If you are against the abolition of inheritance tax, are you also in favour of an increase in inheritance tax?

Further studies and statistics can be found on the websites of the Federal Statistical Office and with us under:

• Real Estate Statistics
• Investing money / Capital investment
• Weather in Germany

Intestate succession

In principle, the topic of “inheritance and estate” is always in good hands with a (specialist) lawyer. The construction of pre- and post-heirs is complicated. Nevertheless, there are a few easy-to-understand principles that every property owner should know and can also easily implement themselves. Here are some questions that come up again and again and which we will answer in the following.

• Pre-heir and post-heir – what is it all about?
• My mother is the previous heir. Is she allowed to sell her part of the house so easily?
• Is the owner (previous heir) entitled to sell the house without the consent of the subsequent heir or does the latter have to agree to the sale?
• I’m heir apparent, now what?
• House sale despite succession?

Pre-heir – post-heir: what does it mean?

Anyone who wants to bequeath something is free to determine the heirs and can therefore also transfer his or her inheritance to several persons in a staggered manner. The subsequent heir is then the person who receives the inheritance only after another person – the so-called previous heir – has previously inherited. The testator can, for example, choose an occasion or a point in time for the succession to occur, such as coming of age or passing the master’s examination.

The previous and subsequent heirs are both legal successors of the testator. However, they do not form a community of heirs in which they would inherit at the same time, but inherit one after the other due to the instigation of the testator.

Pre- and post-heirs for married couples – safeguarding assets in the family

The inheritance regulation by means of a pre- and post-heir is often used by married couples. In this way, they can ensure that all their joint assets remain in their own family. For this purpose, the spouses each name the other as a pre-heir and the joint children as a post-heir. Even in the event of remarriage after the death of one spouse, the assets cannot be inherited by the new spouse.

Pre-heirs – tasks, duties and rights

Pre-heirs are also referred to as ‘temporary heirs’. This is because they only have limited power of disposal over the estate. Particularly in the case of inherited real estate, this situation has consequences for both sides – i.e. the previous and subsequent heirs. First of all there is the inheritance tax. This is always payable initially by the previous heir.

• The previous heir must pay the inheritance tax from the funds of the previous inheritance.
• The previous heir is only the heir until the next of kin occurs.
• If a property is inherited and occupied by the previous and subsequent heirs themselves, no inheritance tax is payable
• The property must be owner-occupied for at least ten years after acceptance of the inheritance
• The owner-occupied living space must not exceed 200 sqm.
• Only then no inheritance tax is due

Statistics – Heritage in Germany

Read more facts and figures here: Real Estate Statistics. We also have other interesting studies, surveys and statistics on the topic: Inheritance in Germany.

Restriction of disposition – exceptions and rights of the previous heirs in real estate transactions

The previous heir cannot dispose freely of the estate. Inheritance law imposes certain restrictions on the disposal of the estate by the previous heir, because in the event of a subsequent inheritance, the assets should accrue to the subsequent heir undiminished. For example, the previous heir may not sell or give away any property from the estate without the consent of the subsequent heir. The previous heir may use other inheritance items for himself, but he is obliged to compensate the successor for the value of the item after the succession has occurred.

However, the testator may exempt the predecessor from many of these restrictions. This is then referred to as an exempt preheir. The “exempt estate” – which may then also include real estate – may be sold by the exempt previous heir alone, without having to obtain the consent of the subsequent heir.

Pre-inheritance & post-inheritance – advice from a lawyer

Broker tip: Watch out when buying inherited real estate

If a property from an estate is to be sold, there are many details to consider – for the seller and also for the buyer. At the latest here – after a lawyer has also been consulted for advice – the broker should come into play. The experts at Lukinski – Lukinski – have the necessary expertise to help with these complex issues.

Especially important: the real estate agent has the necessary distance to accurately determine the value of an inherited property. With inherited houses, money is often given away unnecessarily because the heir wants to get rid of his inherited property quickly. The opposite is also possible: so many memories and emotions are attached to the inherited house that the value is set too high. The property is then difficult to sell.

Find a broker as a pre-heir

Finding a broker as a pre-heir means paying attention to very special services. This is because the broker must be very familiar with the legal intricacies of succession and the connections between the pre- and post-heir.

Lukinski will perform for you as a pre-heir:

• The neutral valuation of your inherited property
• The professional sifting and arrangement of all documents from the inheritance necessary for the sale
• The professional and sales-promoting staging of your object (photos/videos)
• Your emotional state is given special consideration
• The proper creation of an appealing sales exposé
• The discreet placement of your property in all relevant media
• The analysis of our extensive customer file for suitable buyers
• The discreet organisation and execution of viewing appointments
• The discreet conduct of negotiations with prospective buyers (if desired, without your presence)
• Finalization of the purchase contract in cooperation with notaries

When will the broker be paid?

A reputable agent and real estate salesperson will only be paid upon a successful closing and will discuss their fee rate right at the beginning of the sales process. Openness and transparency are therefore fundamental criteria by which the house seller recognizes the good broker.

How much is inherited in Germany?

Here you can see inheritances and gifts in Germany. The survey ranges from 2008 to 2018 and shows that over 110,000 inheritances are distributed each year. Great potential for dispute if the community of heirs does not agree. Here you can find more interesting studies, surveys and statistics on the topic: Inheritance in Germany.

You can find more statistics at Statista

How much money is inherited?

Since 2014, Hamburg in particular has been at the top in Germany. Hamburg is currently at the top with 167.80 euros. In no other city is so much inherited. With a population share 2.19% of total Germany (1.82 million out of 82.79 million), a total volume of 305,731,600 euros is inherited annually.

• Population share Hamburg 2.19%
• Inheritance in Germany (comparison year) 109,635; statistically 2,401 inheritances in Hamburg
• Total inheritance (Hamburg / year) 305.731.600 Euro

You can find more statistics at Statista