Lukinski Check

In my comparison portal you will find the most important topics and good providers. For your construction financing, follow-up financing and much more! Secure good conditions with my Provider Check 2023:

• Comparison

Financing: a comparison of providers

The A&O in real estate investment: Affordable financing!

• Building society savings contract – build up equity
• Construction financing – Favorable interest rates
• Follow-up financing / forward loan
• Installment loan – For small renovations & co.
• Rental deposit – The first rental apartment

Investment: comparison of providers

Building up equity means saving and investing money. Here are my tips:

• Current account – Safekeeping money
• Depot – Invest money
• Call money – putting money aside for the short term
• Fixed-term deposits – putting money aside for the long term
• Roboadvisor – investing money (automated)

Ownership: insurance and sale

Finally, 2 practical comparisons for real estate owners:

• Household contents insurance
• Partial sale

Saving teaches you how to get rich!

What does that mean? Simply put, every euro you save in interest, for example, can be directly reinvested by you as a smart investor. Each euro corresponds to ~ 20% equity for the first, second real estate purchase. So with a loan, 1 euro becomes 6 euros that you can invest. Saving 100 euros in interest = 600 euros more equity, 1,000 euros = 6,000 euros more equity, etc.

Example:

• 100,000 euro loan at 2% interest
• 1st year = 2,000 euros interest costs
• 2nd year = 1,960 euros interest costs
• …
• 39,130.36 Euro interest costs !!!

Insight:

• It pays to compare offers / providers
• Interest is cost factor #1 after the purchase price of the property

Tip! Use the repayment plan calculator (below) to check for yourself how much interest you will be charged each year with only 2% interest costs.

Repayment plan example: 2% for a term of 35 years

Here is an example of financing at 2% over a term of 35 years.

Partnership limited by shares (KGaA) – formation, financing, liability & Co

The partnership limited by shares – abbreviation: KGaA – is a relatively unknown form of corporate law and is formed as a hybrid of the conventional limited partnership – short: Kommandite or KG – plus the classic stock corporation – short: AG. Both the Kommandite and the AG belong to the so-called complete companies and are therefore primarily subject to the German Commercial Code (HGB). The limited partnership belongs beyond that however to the partnerships and has no own legal personality. The stock corporation, on the other hand, is probably the best-known corporation of all and is primarily committed to share trading.

The KGaA adopts the best features of both legal forms: it takes a stock corporation as its basic structure and supplements it with the structure of general partners and limited partners that is characteristic of the KG. Thus, the entrepreneurial management – similar to the AG – is divided into different bodies, whereas the liability risk is distributed among at least one personally liable partner and the remaining partners in the amount of their capital contribution. Although the partnership limited by shares is a limited partnership in name and suggests the legal status of a partnership, beware: it is in fact a corporation by virtue of its legal form, including its own legal personality!

Other typical corporations:

• Stock corporation (AG)
• European Company (Societas Europaea, abbreviated to SE)
• Entrepreneurial company / UG (limited liability)
• Limited liability company (GmbH)

Corporation KGaA – Stock Corporation Act §§ 278 – 290 & §§ 161 – 177a German Commercial Code (HGB)

In principle, the legal basis for partnerships limited by shares is the German Stock Corporation Act (Aktiengesetz, AktG), more precisely: paragraphs 278 to 290, where, among other things, the nature of the KGaA is defined. For the legal position of the individual partners, on the other hand, reference is made to the applicable provisions for conventional limited partnerships, which are found in the German Commercial Code (HGB) – sections 161 to 177a.

Excerpt from the law – § 278 AktG:

(1) A partnership limited by shares is a company with its own legal personality in which at least one partner has unlimited liability to the company’s creditors (general partner) and the others have an interest in the share capital divided into shares without being personally liable for the company’s obligations (limited shareholders).
(2) The legal relationship of the general partners among themselves and vis-à-vis the entirety of the limited liability shareholders as well as vis-à-vis third parties, namely the authority of the general partners to manage and represent the partnership, shall be determined in accordance with the provisions of the Commercial Code on limited partnerships.
(3) In all other respects, the provisions of the First Book concerning the stock corporation shall apply mutatis mutandis to the partnership limited by shares, unless otherwise provided for in the following provisions or in the absence of a management board.

Kommanditgesellschaft auf Aktien – International distribution of the legal form

The partnership limited by shares – abbreviated to KGaA – is where the legal form of a stock corporation and the typical features of a limited partnership meet. The resulting hybrid of a corporation and partnership features has so far been rather rare in Germany, although interest has been slowly but steadily increasing since the end of the 1990s. The partnership limited by shares also appears internationally, for example as a “commercial partnership limited by shares” in English-speaking countries or as a “société en commandite par actions” in France.

International distribution of the KGaA:

• Anglophone region: Commercial partnership limited by shares
• Belgium: Commanditaire vennootschap op aandelen (CommVA)
• Denmark: Partnerselskab (P/S) or Kommanditaktieselskab
• Germany: partnership limited by shares (KGaA)
• France: Société en commandite par actions (SCA)
• Italy: Società in accomandita per azioni (S. a. p. A. / S. A. A.)
• Iceland: Samlagshlutafélag (slhf.)
• Netherlands: Commanditaire vennootschap (CV)
• Poland: SpóÅka Komandytowo-Akcyjna (S. K. A.)
• Portugal: Sociedade em Comandita por acções (SCA)
• Spain: Sociedad comanditaria por acciones

Legal form variant Kapitalgesellschaft & Co KGaA – General partner as legal entity

Sometimes different corporations also appear in combination with a partnership limited by shares (KGaA). For example, family businesses occasionally organise themselves as a Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft auf Aktien – in short: GmbH & Co KGaA. In this case, they form a stock corporation in the legal sense – however, the general partner as personally liable shareholder is not just any natural person, but specifically a limited liability company (GmbH). If the general partner is instead embodied by an AG, it is referred to as an AG & Co KGaA, and in the case of a Societas Europaea, as an SE & Co KGaA.

More about the individual hybrid forms:

• GmbH & Co KGaA – see limited liability company (GmbH)
• AG & Co KGaA – see stock corporation (AG)
• SE & Co KGaA – see Societas Europaea (SE)

CEWE Stiftung & Co. KGaA is a special case: In this company, the general partner is embodied by a foundation. In principle, the partnership limited by shares is possible in all conceivable combinations, as GUB Investment Trust KGaA points out as an example.

Continue reading here on the topic of setting up a family foundation:

• Establish a family foundation

Foundation, company name & organs of a KGaA

The formation process of a partnership limited by shares is based on the formation process of stock corporations. Accordingly, a KGaA is considered a legal entity and can only participate in legal transactions through its executive bodies. Unlike the conventional stock corporation, however, this legal form does not provide for a management board as the governing body, so that the governing bodies of a KGaA are limited to the general meeting – consisting of the total of the limited liability shareholders – and the supervisory board. The management authority and the power to represent the company externally are incumbent on the general partners as personally liable partners.

You can find out here how the process of founding an AG works in detail:

• Formation of a public limited company

A personally liable partner can be either a natural person or a legal entity, which limits his liability to the business assets of the corporation and cleverly avoids personal liability. The limited partners or limited shareholders can also be natural persons or legal entities and are in any case only liable to the extent of their respective share contribution.

To set up your KGaA, you also need the following in brief: a tax identification number (tax ID); the confirmation of registration from the Trade Licensing Office; the shareholders’ agreement aka articles of association together with notarial certification; 50,000 euros of share capital; and finally the entry in the Commercial Register under the company name you have chosen plus the legal form suffix “KGaA”.

Examples of KGaA companies:

• Merck KGaA
• MERKUR PRIVATBANK KGaA

Limited partner & general partner: A question of liability

What is a limited partner and general partner? This is a question many people ask themselves when they first hear about the special characteristics of a limited partnership. This is because, unlike all other partnerships, the partners in a limited partnership are clearly divided into general partners and limited partners. Therefore, a single individual or legal entity can never be a general partner and a general partner at the same time.

Usually, general partners are the personally liable partners of a limited partnership. In a partnership limited by shares, too, a distinction is made between general partner and limited partner, the latter being contextually referred to as limited shareholder. The general partner bears the full risk as a general partner: as with the conventional KG, he is also jointly and severally liable, directly and without limitation with business assets and private assets. The liability risk of the limited shareholders, on the other hand, is limited only to the amount of the mandatory sum that they paid in as a limited partner contribution in the form of shares when the KGaA was formed.

Financing & profit distribution

The financing of a KGaA is advantageous compared to the conventional limited partnership, as equity capital can be raised more easily. Overall, as with the AG, a share capital of 50,000 euros or more is required. With regard to the distribution of profits and loss sharing, there are no special regulations compared to the conventional KG: Either the legal principles come into play or corresponding specifications have been anchored in the articles of association. Profits are distributed in principle to 4 per cent of the capital share plus additional profit “in the appropriate relationship”. Losses are also shared appropriately.

Taxes for company & shareholder: separation principle & transparency principle

Like all other forms of corporate law, the partnership limited by shares is generally liable to pay taxes. It is considered an independent tax subject with regard to corporate income tax and trade tax; all natural persons in the partnership are usually subject to income tax.

Due to its hybrid form, however, special regulations apply to the KGaA under tax law: the taxation of the company itself is based on the separation principle, the taxation of the limited liability shareholders is also based on the separation principle and the taxation of the general partners is compulsorily based on the transparency principle. In the case of taxable turnover, the KGaA is always subject to turnover tax.

• Trade tax (GewSt)
• Value added tax (VAT)
• Income tax (ESt)
• Corporate income tax (KSt)

Taxation of the KGaA – separation principle

As a corporation and legal entity, the partnership limited by shares is generally subject to corporate income tax. Insofar as the KGaA exercises its management and/or its registered office in Germany, it is deemed to be subject to unlimited corporate income tax and must pay tax on its entire global income accordingly. In the case of foreign management and/or foreign registered office with domestic income – for example from a domestic permanent establishment – the KGaA is deemed to have limited tax liability.

The profit of a KGaA is determined by means of a comparison of business assets. For the taxable income, on the other hand, a special provision applies with regard to deductible expenses, which is anchored in the German Corporate Income Tax Act (Körperschaftsteuergesetz, KStG) – the corporate income tax of the KGaA therefore only applies where income is attributable to the share capital, i.e.: the profit shares of the limited liability shareholders. The profit shares of the general partners as well as their management remuneration are deducted in advance and can be deducted as operating expenses. They do not come into play in the calculation of the KGaA’s income, but must be taxed by the general partners themselves.

Excerpt from the law – Section 9 (1) no. 1 KStG:

in the case of partnerships limited by shares and comparable corporations, that part of the profit which is distributed to personally liable partners on their contributions not made to the share capital or as remuneration (bonus) for management;

The KGaA must pay trade tax as an entrepreneur, regardless of its hybrid structure. Thus, the determined profit from business operations – increased and decreased by the amounts specified in the Trade Tax Act (GewSt) – is understood as the trade income of the KGaA. The amounts previously calculated for corporate income tax purposes for profit shares and management remuneration of the general partners are now added back to the calculated profit from business operations, thereby ensuring that no amounts escape taxation through trade tax.

Taxation of the limited liability shareholders of the KGaA – separation principle

As natural persons, limited shareholders do not have to pay corporate income tax. Therefore, their profit shares and any management remuneration are settled via the partnership limited by shares itself. Like their counterparts in the conventional limited partnership, they are subject to income tax in the event of a dividend distribution. If they hold limited partnership shares as private assets, they generate income from capital assets in accordance with the German Income Tax Act (EStG).

Taxation of the general partners of the KGaA – separation principle

General partners are taxed like co-entrepreneurs for the purposes of tax law. In this context, they are not to be regarded as co-entrepreneurs, but merely treated as co-entrepreneurs – a small but significant difference… especially in terms of “taxes”! As natural persons, general partners are subject to income tax as normal and must pay tax on their income from business operations.

In contrast to the limited liability shareholders, general partners are required to pay corporate income tax: Their profit shares and any management remuneration are deducted from the KGaA’s income to be determined and charged directly to the general partners. The corresponding amounts must be taxed as part of the income tax return.

Partnership limited by shares (KGaA) – For whom is it worthwhile?

The possibility of easy capital procurement is certainly one of the reasons for founders of new businesses to opt for the formation of a KGaA. In addition, the partnership limited by shares has a high resistance to takeovers, which is why the individual partners can contribute personally and maintain their entrepreneurial commitment despite high capital contributions. The sometimes high liability risk of the general partner can be absorbed by the clever positioning of a GmbH or AG as a personally liable partner.

So who is the partnership limited by shares suitable for? This legal form is worthwhile for start-ups that cannot avoid external financing, but do not want to make any concessions with regard to their decision-making authority as well as the management of their company. The special legal form of the KGaA provides family businesses with a company in which control does not have to be transferred to outside hands as soon as share capital is issued as shares.

Alternatives to the KGaA: Legal forms in Germany

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

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

GmbH & Co KG – formation, financing, liability & Co

The limited partnership – in short: Kommandite or KG – is one of the so-called complete companies and, as a partnership, is subject to the German Commercial Code (HGB). The formation process for this legal form of company is quite uncomplicated, as it can be formed informally and requires a minimum of only two founding members. It can be formed by both natural persons and legal entities. A maximum number of permissible shareholders is not specified by law.

If all general partners of a KG consist of limited liability companies (GmbH), they form a so-called Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft – called GmbH & Co KG for short. Such a GmbH is sometimes also referred to as a general partner GmbH, but beware: the general partner GmbH is a corporation and part of the GmbH & Co KG, while the GmbH & Co KG by virtue of its legal form is always a partnership!

Other typical partnerships:

• Limited partnership (KG)
• General partnership (OHG)
• Limited Liability Company and Compagnie General Partnership(GmbH & Co OHG)

Foundation & Company Name

Two persons are required for the formation of a GmbH & Co KG: The GmbH as full partner – i.e. general partner – and a natural person as partial partner – called limited partner. If you are starting from scratch, you must first establish a limited liability company in preparation. To do this, you need the following in a nutshell: a natural person or legal entity as the founder of the company; a tax identification number (tax ID); the confirmation of registration from the trade office; the shareholders’ agreement aka articles of association together with notarial certification; 25,000 euros in share capital; and finally the entry in the commercial register.

You can find out how the process of setting up a GmbH works in detail here:

• Establishment of a limited liability company (GmbH)

You have successfuly founded your GmbH? The limited partner is ready to go? Then the next step is to set up a limited liability company (Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft). Since the GmbH & Co KG is a separate company, you again need a tax ID and must register the company with the trade office. The establishment of articles of association is also mandatory and of course your company needs a suitable company name including the company suffix “GmbH & Co KG”.

Management & power of representation

As a general partner, the GmbH basically has power of representation in the external relationship. However, since a GmbH is a legal entity, the management authority is entrusted to a natural person. This may be a shareholder of the general partner GmbH or the position may be assigned externally to a so-called third-party managing director. In this case, there is often talk of a third party board of directors or external board of directors.

Alternatively, limited partners may also act as managing directors, provided they are expressly appointed to this body. Since limited partners are generally excluded from management, their management authority in this case is, however, limited to the right of objection in the case of extraordinary transactions.

Profit distribution & loss sharing

With regard to the distribution of profits and the sharing of losses, either the statutory principles come into play or corresponding specifications have been anchored in the articles of association. Profits are generally distributed at 4 percent of the capital share plus additional profit “in reasonable proportion”. Losses are also shared appropriately.

It is possible to completely exclude the general partner GmbH from the distribution of profits by means of a declaration in the shareholders’ agreement, whereby higher profits can be distributed to the investors. Insofar as the GmbH has inherent management authority, it can be paid an appropriate remuneration to compensate for its role as managing director, whereby a managing director’s remuneration cannot be deducted in total as a business expense for tax purposes. However, the remuneration is paid irrespective of the profits generated and thereby has the effect, if applicable, that the entire company can save taxes.

General partner, partial partner & tax liability

Usually, the general partners of a limited partnership are liable without limitation and jointly and severally – i.e. with their business assets plus private assets. If, on the other hand, the general partner of a KG appears in the form of a limited liability company (GmbH), he is liable as a legal entity only to the extent of the GmbH’s capital contribution. Limited partners are liable – as in the case of a conventional KG – only to the extent of the mandatory sum that they paid in as a limited partner’s contribution when the GmbH & Co KG was founded.

Like all other legal forms of companies, the Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft is generally liable to pay taxes. First and foremost, they are subject to trade tax and – in the case of taxable turnover – turnover tax. A GmbH & Co KG is generally exempt from income tax and corporation tax… However, profit income is still subject to taxation: corporation tax is applied to the profit share of the general partner GmbH, whereas limited partners must pay income tax on their profit.

• Trade tax (GewSt)
• Value added tax (VAT)
• Income tax (ESt)
• Corporate income tax (KSt)

Tip. All taxes for companies in one list:

• Taxes in Germany

GmbH & Co KG – For whom is it worthwhile?

A significant advantage of a GmbH & Co KG is undoubtedly the limitation of liability to the business assets of the general partner GmbH. This means that founders do not directly risk the existence of their company if an investment turns out to be disadvantageous, and they can quickly increase their equity capital through the flexible and simple admission of new limited partners. They can confidently outsource the organisational effort and the management to an outside body or make deviating succession arrangements in order to maintain the GmbH & Co KG.

So who is the GmbH & Co KG suitable for? This legal form is worthwhile for start-ups who would like to set up their business as a partnership without having to forego the special liability restrictions of a GmbH. A GmbH & Co KG is also conceivable as an asset-managing company and for family businesses.

Alternatives to the GmbH & Co KG: Legal forms in Germany

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

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

More knowledge, Less Tax Burden

Basically, the more knowledge you acquire in terms of finances, taxes and individual tax situations, the better you can design your taxes. As I already mentioned in the article “Billion-dollar gift for Springer boss: Shares are tax-free?”, financial optimization is all about understanding and knowledge: Knowing that your tax advisor does not have and will never have. If he or she did, then he or she would be an investor himself.

Operationalization of the Tax Saving Elements

The second step is the operationalization, i.e. the practical application, specifically adapted to the particularities of your company. The industry does not matter, real estate investor, financial intermediary, lawyer or even tax advisor itself. If you know the legal methods and ways of tax optimization, you can instruct your tax consultant to do the right things. The tax consultant should then take care of the operational work. Everything strategic, methodical, you should master.

Tax model: Individual Methodology from Tax Tools

The ultimate goal is an optimal tax model that fits exactly to your individual constellation. Just like the US President. According to research of the New York Times he pays only $750 income tax. Many factors play a role here. In the area of real estate, companies, inventory and also private aspects such as family ties play a major role. As a young real estate investor it is still easy to add a second city to your portfolio, for example Hamburg and Berlin. As soon as the family is there, at the latest children, one’s own sphere of activity is naturally limited.

Factors for tax models, which your tax advisor will never be able to fully grasp with increasing complexity, are manifold. These would be just examples, which can also change depending on how your own portfolio is spread.

Tax model factors that influence the choice of methodology:

1. Company and industry(ies)
2. Real estate portfolio
3. Income from capital and investment portfolio
4. Strategic business planning
5. Private factors (partner, children, etc.)

Control Optimization: Process and Knowledge Build-Up

In this small, exaggerated infographics you can see how effective your knowledge, your tax burden will be gradually reduced.
Of course it is not as “extreme” as in this graphic in all areas. But in many it is possible. Just take a look at the example of the almost tax-free share donation.

Finance Basics: From Founder to Millionaire Entrepreneur

Here are my basic tips if you want to go from a solid foundation to a strong millionaire entrepreneur.

1. Submit tax return (mentioned for completeness)
2. Tax consultant (list with recommendations is also included)
3. Tax Coachings (only from professionals with best practice)
4. Experience of other CEOs, CFOs, senior executives, etc.

Tip 1: Submit your own Tax Return

The tip sounds simple, but is the absolute foundation. Not everyone who reads this guide is familiar with taxes, entrepreneurship and financing. Many are at the beginning of their career, perhaps even in the start-up phase. For you, too, I want to give you first, valuable tips on tax optimization.

In general, everyone who submits a tax return saves money. As a small motivation for your first tax saving, on average every citizen who submits a tax return gets a refund of 1,007 Euros.

I have done my tax declaration myself for many years, so I always knew about every item, about allowances, about duties and taxes. Today, this small-scale knowledge helps me to decipher complex processes in detail.

Or in short and simple terms: Nobody can fool you. Or only very, very, very few who have even more knowledge about legal tax models.

Tip 2 for Everyone: Tax Consultant

Work together with a tax consultant. This will allow you to take advantage of all the benefits that are regularly available or simple. This includes for example tax allowances.

A tax consultant is perfect to “seal the deal” with your accounting. But from experience you will never get proactive, really efficient tax tips. Tax consultants have many clients.
Nevertheless, you need a good tax consultant or a good tax office.

Tip 3 for Business Owners: Tax Coachings

So at some point you come to the point where you have to turn directly to experts. For this, there are either YouTube channels or books or tax coaching. Of course, I have tested all of them, but in the end, tax coaching is the most effective way.

The advantage of tax coaching as an online course: You combine different learning factors. You watch videos, perceive contents audiovisually, have checklists for in-depth application.

• Free courses are free of charge because they do not offer assets (content)
• Paid online courses offer know-how that not everyone should know
• PS: Please buy such courses only from tax experts with references
• Multimedia learning
• Contents repeatable

Tip 4 for Tax Savers: Experiences of Other CFOs, …

Experience of other CEOs, CFOs, senior executives, etc. with reputation and successful, lasting business At the latest after step 3 and your own, first years, you know immediately what that means.

In fact, I have also traveled a lot. Because especially from friends, i.e. “entrepreneur friends”, you learn the most. The big question is then always:

How do you do that?

No matter if it is about buying ETF packages in the savings plan (2.5% tax saved) or buying real estate without equity (yes, you only need to be able to hold equity if you do it skillfully).

You notice, I could tell you a lot about the tax return. Also to the tax consultant. But as soon as it comes to tax optimization, the matter becomes very dense. Knowledge cannot be put into a few words. Therefore, repeated briefly, take all tips to heart. If your assets grow, always remember to follow tip 3 & 4. The factor “tax” is getting bigger and bigger and the knowledge of how to deal with it, or rather how to structure it, transforms taxes into private assets.

Tax is like being an “entrepreneur”, a constant journey. The good thing is that every new destination is worth the adventure!

Reading Tips: Asset Building & Co.

Here I have some reading tips for you:

1. “Billion-dollar gift: shares largely tax-free”
2. Taxes & Assets: learning from investor experiences

“Billion-Euro Gift: Shares Largely Tax-Free”

“Billion dollar gift for Döpfner – largely tax-free?” – this headline is not from me, but from the morning mail. In fact, Matthias Döpfner has turned the publishing house upside down as boss. While owner Friede Springer stands confidently behind his decisions. Print shares were sold, new online media such as Business Insider, Idealo, Immowelt and StepStone were acquired. Already in 2012 Döpfner has received a big share package for more than 70 million Euro, now a “billion-dollar gift” for the Axel Springer boss is going to go, according to Manager Magazin. The 57-year-old media manager is increasing his previous stake in Axel Springer SE from just under three percent to a total of around 22 percent.

Tip! How does it work that you can get a block of shares almost tax-free? A little further down in the article I explain the methodology, or rather the law behind it.

• Give away shares: largely tax-free?

The President of the USA only Pays 750 Euro Income Tax: How does it work?

According to the New York Times, Donald Trump paid only 750 Euro income tax. It gets even better, according to the New York Times, Trump paid no income tax in 10 of 15 years starting in 2000. Are these questionable tax saving strategies or simply tax optimization? All the methods he uses are legitimate and legal. How does he do this?

• US President pays 750 Euro income tax

New York: Many Cities in One

Buying New York Real Estate is a challenge, and we help you with the most important information about where and how to buy here. New York City has 5 boroughs: Bronx, Brooklyn, Manhattan, Queens und Staten Island. Manhattan itself is an island divided into numerous neighborhoods, so-called Neighborhoods. The Bronx is located on the mainland, north of Manhattan, Queens and Brooklyn on the western tip of Long Island. While Staten island is an island separate from the others. The five boroughs are connected by numerous bridges, ferries and tunnels, so it’s possible to get almost everywhere by subway. Each has their own unique style, and is famous for different things. It’s no wonder more and more people are buying an apartment in New York or buying a house in New York.

What makes NYC Unique – Not Just good Property Investment

More than 8 million people live in New York, in a total area of 1,214.4 square kilometers. Countless galeries, museums, theaters, parks, restaurants and sights attract around 50 million visitors annually. A cultural melting pot, over 800 languages are spoken, and you can find food from almost every place on earth. In addition, New York is one of the most important trading cities in the world. In addition to the stock exchange, many international corporations have their headquarters here, forming an important economic area. Being one of the world’s financial centers, investing is a large market. Read more about investing in New York.

Geographic Explanation – Different Cultures in NYC

One example is the Bronx, New York’s northernmost district. There you will find for example Yankee Stadium, Bronx Zoo, Woodlawn Cemetery, Little Italy and the New York Botanical Garden. Today, in addition to apartment buildings and social housing, there are also residential districts of the middle class in the Bronx. Like no other district in New York, immigrants from Central and South America, Africa and Kosovo have shaped the cityscape. This is in contrast to Manhattan’s wall street and businessman lifestyle, or Brooklyn’s art and student scene. New York City offers many things for diverse groups of people, among others being strong investment opportunities.

Investing in the Big Apple

Manhattan, Upper East Side, Midtown & Co. Buying luxury real estate in New York requires local market knowledge. Especially in times of low interest rates it is worthwhile to invest in a good property, whether in New York, Los Angeles, Miami or even cities like Chicago. From New York property taxes, to the small 50-80 sqm condominium to the spacious private property with up to 1,800 sqm of land. We track down the properties that offer the greatest return and the greatest possible luxury and comfort for you. Back to: Luxury realtor + properties.

• Investing in New York

New York from the Sky

Below a video showcasing the dramatic skyline of New York with a drone flight taking you between the skyscrapers.

Real Estate Investment: Now is the Time

New York needs no introduction. The big apple is one of the biggest tourism destinations, art powerhouses, financial and population centers, and much much more. The districts which are important to know for investments are mostly in Brooklyn, where a combination of gentrification, low prices, and an attractive atmosphere make living increasingly more attractive. Just taking a short look at Williamsburg shows everything you need to know. Not to forget as demanding attention, Bushwick, Bedford-Stuyvesant and Flatbush. Buying an apartment in New York‘s hippest areas is bound to be a challenge.

Strong Economy Means Smart Investment

In regards to economic developments, New York is seeing a surge. Recently, many top companies from digital sectors have moved headquarters or opened offices in the city. This means increased investments in multiple sectors, as well as increased demand for rentals in the inner city. The general real estate market has weakened over recent times, meaning the classic investments of earlier years like TriBeCa or Soho where high square meter prices dominate, are currently clever investments. The market is likely to recover, and these parts are unlikely to become unpopular.

Buy or Rent?

So you’re looking at real estate in New York, what do you have to know? First, it depends on where and how long. If you’re looking at the downtown core, like Manhattan, it’s near-impossible to buy, and rent is comparatively cheap. In up-and-coming neighbourhoods like Chelsea, or even better Bushwick, you’re well-taken care of to buy. Buying in Bushwick carries the same financial load as renting for three and a half years. So, if you want to go straight to the core, in Manhattan, SoHo or TriBeCa, hesitate with a purchase, while places like Brooklyn, with comparatively high rent prices are the places to buy.

What are the Prices Like?

Properties are becoming increasingly large. This is acccompanied by an increase in purchases of properties valued at more than $1 mil. In New York, real estate is all about location though, with Manhattan. On average throughout all of New York City, one-bedroom apartments can be had for $2.810/month, or two-bedroom apartments at $3.576/month. In e.g. East Brooklyn, the average rent is at $1.250/month, demonstrating the large gap. The prices for apartments below:

• Median price: $916.000
• Average per square meter: $7.244/m²

New York Taxes

New York, like every state has its own tax system. It’s complicated, and the most you can do is try to understand it. We have a short summary below of New York real estate taxes.

Interested in property taxes in New York? Our full article on the matter should be interesting to you:

• New York Property Taxes – Everything to Know

New York Property Tax Explained

In New York, property tax is quite high compared to other states. In New York State, property taxes change from year to year, depending on the needs of the state. Additionally, it is also complicated by the fact that tax rates are constructed in millage rates as opposed to tax rates

Mill Rates are Tax Rates

Millage rates serve the same purpose and work quite similarly to conventional property tax rates. A millage rate, is first and foremost a number. This number indicates the amount of property tax a property owner is required to pay for their property. A mill rate of 1 indicates 1$ of tax for $1.000 worth of property, a mill rate of 24 indicates $24 of tax per $1.000 worth of property.

• Mill Rate of 1 indicates 1$ of tax for $1.000 worth of property

Residential Assessment Ratios

Sounds complicated, but if you’re looking into buying real estate in New York, you have to know what RAR’s are. RAR’s are a method by which the state accounts for fluctuations in the real estate market. You can challenge the assessment given to you via the RAR when you believe you property is worth 10% less than the assessment. By law, the equalization rates are used to divide taxes in tax zones that cross municipal boundaries. These tax jurisdictions can be school districts or the county.

• RAR is a ratio determining the assessment of your home

Too Much Property Taxes on your Home?

As always, there is an assessment on the value of your home. To calculate the property taxes you have to pay, you would usually calculate your property tax by multiplying this by the tax rate of your county. In New York state, you receive an approximate value which you multiply by the Residential Assessment Ratio. This gives you a value on your property, based on which you will pay your property tax.

Estimated Value = Assessment Value x RAR

Buying Property: Mansion Tax

When buying a property in New York city, you may be subject to the “mansion tax”, beginning with an extra rate of 1% when buying properties worth more than $1.000.000. This tax is intended to provide the state more funding from high earners or those with more capital. This tax, unlike property transfer tax, is paid by the buyer. For this reason it is also a staggered tax, with higher property prices incurring higher rates. These rates are from 1% up to 3.9% depending on the value of the property. Below the mansion tax rates, depending on the amount the property is bought for.

• 1.00% – $1.000.00 < $1.999.999
• 1.25% – $2,000,000 < $2,999,999
• 1.50% – $3,000,000 < $4,999,999
• 2.25% – $5,000,000 < $9,999,999
• 3.25% – $10,000,000 < $14,999,999
• 3.50% – $15,000,000 < $19,999,999
• 3.75% – $20,000,000 < $24,999,999
• 3.90% – $25,000,000 or more

Mansion tax is just one of the taxes you have to pay when buying real estate. Learn more in our article on Taxes You Pay when Buying a Property.

Neighborhoods for Real Estate Investment – SoHo, Williamsburg, TriBeCa

There are too many neighborhoods to remember. Here we present the most important, hottest, and up-and-coming neighborhoods to keep in mind. If you’re looking to buy real estate in New York, these are where to look. They are home to some of the most interesting and luxurious real estate in North America, read more New York Luxury Real Estate.

1. East Village
2. SoHo
3. Park Slope
4. Williamsburg
5. Greenwich Village
6. Chelsea
7. TriBeCa

East Village

Once a paradise for hippies and the punk movement. Without losing its artistic touch, the East Village is now home to many boutiques and restaurants. Among those who have lived here: Madonna, Lady Gaga, Lou Reed, Iggy Pop. The East Village covers the area east of 3rd Avenue and Bowery to the East River, between 14th Street and Houston Street.

SoHo

SoHo represents what many people first think of when they hear New York. A chic neighborhood full of art galeries, boutiques, restaurants and bars. SoHo is a shopping and nightlife district, but also one of the safest neighborhoods. This is also a hotspot for movie productions and film stars!

Park Slope

Park Slope is the definition of a well-rounded neighborhood. It is blessed with excellent public schools, low crime rates, extensive green spaces, diverse shoping opportunities, and a population with more artists and creative people than even Williamsburg (see below), along with high-end restaurants and bars, and Prospect Park, one of New York’s most beloved and famous parks.

Williamsburg

Williamsburg, the birthplace of hipsters, and current home to many artists and personalities.Besides small stores you will find many interesting art galeries and street markets, along with many cafes and cozy bars where you can try local beers, combined with ever-improving public transportation connections to nearby Manhattan. Williamsburg presents the alternative side of New York and it is quite refreshing.

Greenwich Village

Greenwich Village (or simply “The Village”) is the part of NYC where everything is a little different and quirky. The residents are mostly students and the young working class. The neighborhood also offers some of the best private schools in the city, high-end restaurants, shopping malls, and is an entertainment center. The streets in the Village are not geometrically organized like in most parts of New York, which makes it feel like a real village.

Chelsea

Chelsea is one of the hippest neighborhoods in New York, offering many cool art galeries, classy boutiques and even classier restaurants, which attract especially a young audience. Chelsea is especially popular with writers, painters and actors. The area has very good public schools, large health and fitness facilities and a vibrant nightlife and many outdoor activities and transportation. The optimal place to settle down with families as the neighbor’s safety is quite high and the crime rate is low.

TriBeCa

According to Forbes magazine, TriBeCa is the most expensive neighborhood in New York and home to stars like Beyonce and Jay Z, Justin Timberlake and Leonardo DiCaprio. It is not surprising that you will find many luxurious stores and restaurants here such as at the exclusive Tribeca Grill. In general you should have enough money with you when you visit TriBeCa.

More Popular New York Neighborhoods

There are more neighborhoods, which may not be the first places to think of, but which still have a strong personality and much to offer. These include Bedford-Stuyvesant, one of the most up-and-coming neighborhoods in all of New York, Flatiron, home of Jeff Bezos’ $80 million apartment, or the Upper West Side, setting of a West Side Story.

• Sunset Park
• Riverdale
• Parkchester
• Battery Park & Financial District
• New Dorp
• Chelsea
• West Village
• Chinatown
• Sunny Side
• Jackson Heights
• Inwood
• Bedford Park
• Dumbo
• Brighton Beach
• Upper East Side
• Harlem
• Morningside Heights
• Carroll Gardens
• Corona Park
• Co-op City
• Upper West Side
• Bay Ridge
• Woodside
• Flushing
• St. George
• Fort Greene
• Flatiron & Gramercy
• Red Hook
• Astoria
• Sheepshead Bay
• Washington Heights
• Cobble Hill & Boerum Hill
• Nolita & Little Italy
• Belmont

Special – Buy Apartment New York

New York, the city of dreams. You too can live your dream of owning real estate, and that in one of the top cities worldwide in everything from fashion to finance to art and food. Buying an apartment in New York certainly isn’t the easiest of tasks, but one that is likely to leave you happy you took the risk. But! New York has a complicated real estate system as everyone knows. Buying an apartment here means many different things than it does in other parts of the U.S.A.

We take care of all questions you could have in our full guide on buying an apartment in New York

Buy Apartment New York – Full Guide