Island | Lukinski https://lukinski.com Sun, 11 Feb 2024 12:08:21 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.5 Selling an apartment building Taxes: Asset & Share Deal https://lukinski.com/selling-an-apartment-building-taxes-asset-share-deal/ Sun, 11 Feb 2024 12:08:21 +0000 https://lukinski.de/selling-an-apartment-building-taxes-asset-share-deal/ You want to sell your apartment building, what will you have to pay? When selling residential or residential and commercial properties, first-time sellers ask themselves one question in particular: How much tax do I have to pay on the sale? Here is a quick insight into the typical taxation of real estate sales. Want to learn more? My tip: the right experts and real estate tax coaching (not from a tax advisor, but from real-life investors). I will be happy to put you in touch with my experts, just write to me: Contact.

The typical sale: “asset deal”

The difference: In an asset deal in the real estate context, specific assets such as land and buildings are sold individually, whereas in a share deal the shares in the company that owns the real estate are transferred.

Simply put:

A share deal means that the buyer does not acquire the property itself, but the – in this case – Immobilien GmbH. Here is a short infographic. Then back to the direct sale of the apartment building, after which I will explain more about holding companies and taxes on the sale.

Want to learn more?

Typically, as a private individual, you usually sell the apartment building directly. These are relevant for you:

  1. Speculation tax
  2. Three-object rule

Taxes on sale

A very quick look at taxes when selling an apartment building in Berlin:

  1. Speculation tax: sell tax-free
  2. 3 objects rule in Berlin
  3. Asset & share deals: only 1.54% tax

Speculation tax: sell tax-free

The speculation period explained more quickly:

  • Owner-occupied = 3 years
  • Rented = 10 years

If you sell within the speculation period, you must – simply put – pay tax on the profits as normal, just like income from work, regardless of whether you are employed or self-employed. After the period has expired, the sale is tax-free. If you want to do a quick calculation, use my free speculation period calculator.

Tax calculation: Example

If you sell within the speculation period, you must – simply put – pay tax on the profits as normal, just like income from work, regardless of whether you are employed or self-employed. As a single person, this would typically mean a top tax rate of 42%.

Sale within the speculation period (< 10 years) as a private individual:

  • Purchase 2024 = 2,100,000 euros
  • Sale in 2033 = 4,100,000 euros
  • Taxable profit = 2,000,000 euros
  • At 42% (single person) = 840,000 euros

Sale within the speculation period (< 10 years) as a company:

  • Purchase 2024 = 2,100,000 euros
  • Sale in 2033 = 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 within the speculation period (> 10 years):

  • Purchase 2024 = 2,100,000 euros
  • Sale in 2034 = 4,100,000 euros
  • Taxable profit = 2,000,000 euros
  • Tax free

But you can’t buy 10 properties now, wait 3 years and take the profits from property appreciation, because:

3 objects rule in Berlin

There is also the 3-property rule. If you sell more than 3 properties in 5 years, it is commercial real estate trading.

When selling real estate, the “3-object rule” refers to the fact that private individuals in Germany can sell up to three properties within a five-year period tax-free. If a person sells more than three properties within this period, this is considered commercial real estate trading and is subject to income tax – even if they are not rented out but are owner-occupied.

After 10 years of holding, however, the sale is always tax-free.

Why does this rule exist?

Just like the speculation tax, the rule is intended to curb speculation on the real estate market and encourage the sale of real estate for residential purposes.

So how do the “big players” save on taxes?

Share deals: selling a company “instead of” real estate

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).

Only 1.54% tax on sale

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(Section 8b KStG).

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

Let us now calculate our example again, starting with the direct sale of a property:

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):

  • 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.

No real estate 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 a capital 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.

Want to learn more?

Real estate & tax coaching

Real estate & tax coaching from experts and investors. I am happy to bring you together with the best:

Here you can find more for:

]]> Real estate holding: box privilege and only 1.54% tax on sale https://lukinski.com/real-estate-holding-box-privilege-and-only-1-54-tax-on-sale/ Sat, 03 Feb 2024 16:36:46 +0000 https://lukinski.de/real-estate-holding-box-privilege-and-only-1-54-tax-on-sale/ Nesting privilege, my new favorite word! Although I’ve known about the holding model for ages, today was the first time I heard the term “Schachtelprivileg”. Simply put: only 1.54% tax on the sale of real estate! If you’re wide-eyed now, check out this short article on real estate holding. Tip! Learn more about legal forms and alternatives in Germany here: Legal forms in Germany.

Box privilege: save taxes when selling real estate

Nesting privilege: a term worth knowing!

Although I have been using the holding model in the real estate industry for years, I only recently came across the term “nesting privilege”. The bottom line? Only 1.54% tax on real estate sales! If you’re wondering, let me introduce you to the world of real estate holding in this short article.

The taxation of a real estate GmbH

A GmbH is subject to corporation tax, the solidarity surcharge and trade tax, which results in an effective tax rate of approximately 30%.

However, if you set up your GmbH in the context of real estate projects, you can benefit from the extended reduction in trade tax.

In this case, you only pay 15.83% tax on rental income and lease fees.

The same low tax rate also applies to the sale of real estate. However, care must be taken here to avoid falling into the category of commercial property trading. You may sell a maximum of three properties within five years, otherwise the tax rate rises to 30%.

The share deal offers an even more tax-efficient option for real estate sales.

Real estate holding company: Reduce the tax burden to 1.54%

By cleverly structuring your GmbH, you can reduce the tax burden on the sale of real estate to just 1.54%. A little more striking:

1.54% Taxes on sale

This concept, known as a share deal, benefits from a holding structure and the nesting privilege. Your business structure consists of two limited liability companies. One of the companies acquires the real estate, while the second limited company acts as the parent holding company. If you now want to sell your property, the holding company transfers the shares in your real estate GmbH to the buyer.

The nesting privilege comes into play here

If a corporation sells shares in another corporation, 95% of the profits remain tax-free.

This means that your effective tax rate on the profit from the sale of the property is only 1.54%.

More about GmbH & asset-managing GmbH

Learn more about the GmbH here

]]> Living on Norderney: Buying real estate on the East Frisian island – tips, viewing and prices per square metre for house, flat & property https://lukinski.com/living-on-norderney-buying-real-estate-on-the-east-frisian-island-tips-viewing-and-prices-per-square-metre-for-house-flat-property/ Mon, 14 Jun 2021 16:37:24 +0000 https://lukinski.de/living-on-norderney-buying-real-estate-on-the-east-frisian-island-tips-viewing-and-prices-per-square-metre-for-house-flat-property/ Living on Norderney – as one of the seven East Frisian Islands, charming Norderney delights with its fairytale beaches, unique island flair and colourful mix of nature and culture, history and modernity. You would like to move to Norderney and buy a house or a plot of land? Would you like to invest in an exclusive home of your own or in a property as a capital investment? Find out everything you need to know about living on Norderney, from the most famous sights to prices per square metre, top locations & Co. – Welcome to Norderney!

Living on Norderney: Elegant island flair with charming suburban atmosphere

Are you looking for an exclusive holiday home away from the hustle and bustle of the mainland? You want to enjoy the fresh sea air, fine sandy beach and romantic sunsets? Privacy, tranquility and discretion are important to you? Then you have come to the right place! Live on Norderney, live with the tides and feel the unique freedom that only island living can bring. All about the most attractive residential areas on the island more in a moment.

Norderney: Map & Location

Norderney is one of the seven inhabitable East Frisian Islands in northern Germany. The island covers an area of 26.29 square kilometres and stretches over 14 kilometres from east to west. The widest part of the island measures just 2.5 kilometres and is located in the centre of the island.

Places of interest: Lighthouse, local museum, Cape & Co.

Bömmels Bimmelbahn invites you on a two-hour exploration tour through the island, the lighthouse and windmill inspire as a highlight in the landscape and the museum of local history is the perfect place to go for an interesting and rainy afternoon. Norderney may be a small island, but it has so much to offer. Whether art, culture or history – it never gets boring here.

Some of the most popular attractions include:

  • Bömmel’s narrow gauge railway
  • Norderney lighthouse
  • Norderney windmill
  • The Cape
  • Wilhelm Dorenbusch Observatory
  • Museum of local history
  • Kurtheater Norderney

Sightseeing: A tour of Norderney

Nature and entertainment, suburban flair and romantic sandy beaches – the island of Norderney combines everything your heart desires. In the west lies with the city the center of the island, in the north and south shine fabulous sand dunes and untouched nature and also the east of the island with its historic shipwreck invites you to discover. Join us on our tour of charming Norderney.

City centre: relaxed suburban flair and elegant boutiques

In the west of the island lies the eponymous town of Norderney. This is not only home to most of the island’s residents, but also to exclusive cafés, small restaurants and elegant boutiques.

Untouched nature: Breathtaking sand dunes in the north

Probably the most beautiful sand dunes in Germany can be found in the north of the island – and also one of the largest dunes. See more here:

Living on the seashore: house and apartment Fischerhafen

Properties near the shore are particularly popular. The fresh sea breeze, the gentle sound of the surf and the fairytale landscape make living here attractive.

Real estate & prices per square metre in Norderney

Renovated loft, spacious beach house or exclusive villa – everyone can find their dream property in Norderney. The best residential complexes in Germany can be found here. No wonder, after all Norderney is next to Sylt at the top of the list of the most exclusive island resorts in the Federal Republic. Above all houses, which are older than 3 years, and new building dwellings are in demand. Some new apartments with a view and modern direction can quickly cost over 10,000 euros per square metre.

Here is an overview of all prices per square metre:

  • Buy a house (existing): 6.788 €/m²
  • Buy a house (New): 3.301 €/m²
  • Buy apartment (existing): 10,060 €/m²
  • Buy apartment (New): 10.555 €/m²

Conclusion: Living on Norderney

The East Frisian island inspires not only with its island flair and the breathtaking nature, but also by its proximity to the mainland, the good infrastructure and the exclusive real estate market. Anyone who owns a property here can consider themselves lucky. After all, properties are highly sought after and are usually already off the market after 90 days. We therefore recommend that you contact the real estate agent you trust. An experienced real estate agent will not only advise you on the purchase of real estate, but also on finances, taxes and off market.

]]> Legal forms company / enterprise (real estate): GbR, KG, GmbH, AG & Co. – comparison, advantages and taxes https://lukinski.com/legal-forms-company-enterprise-real-estate-gbr-kg-gmbh-ag-co-comparison-advantages-and-taxes/ Fri, 26 Feb 2021 14:01:39 +0000 https://lukinski.de/legal-forms-company-enterprise-real-estate-gbr-kg-gmbh-ag-co-comparison-advantages-and-taxes/ Legal forms – What types of company are there? If you want to found your first company, then the choice of the legal form is one of the first steps in the process of founding a company. Whether it is a special real estate company or a start-up, here I have summarized all types of companies in Germany for you. In this list of companies you will find explanations, advantages, disadvantages, costs, the process with checklists and requirements, for each type of company. In addition, especially for real estate owners, as an extra: real estate GmbH (asset-managing GmbH) and family foundation with tax advantages. All legal forms in one list! Your first company? Learn how it works here: Founding a company.

Real estate company: Start a business

You want to buy your first property and rent it out? You have inherited a property and now you want to be active in property management, property administration and other related areas or even more, you want to become a property investor yourself? Then the big question is, which company is right for you? What is the first step?

Basically, you have many different possibilities and options how you can set up your business for the future. Roughly explained, everything starts with the sole proprietorship and goes over individual and cooperation models such as OHG and UG to the GmbH.

To give you a first overview, I have written this guide to the different types of companies for you. Here you will get to know the different possibilities you have as a founder in Germany. Definitions, tips for founding, advantages, disadvantages, as well as taxes. Everything you need to have a good basis for decision-making.

Factors: Property type, rental, structure

There is the right type of company for every type of property (condominium, apartment building or property in need of renovation), for the type of rental and structure, depending on your personal requirements. If you later have several properties in your portfolio, you will also choose different company types for the individual properties.

If you are facing the question for the first time: Which company should I found? Here is an overview of all company forms

From the beginnings, as an individual businessman & businesswoman, to simple forms of cooperation with other business partners, to the real estate GmbH and finally AG.

Company: List

  1. Sole trader / sole proprietor
  2. Civil law partnership (GbR)
  3. Registered businessman (e.K.)
  4. General partnership (OHG)
  5. Limited partnership (KG)
  6. Entrepreneurial company (UG)
  7. Limited liability company (GmbH)
  8. GmbH & Co KG, GmbH & Co OHG
  9. Stock corporation (AG)

Also in focus:

  1. Real estate GmbH / Asset management GmbH
  2. Family Foundation

Tip. According to the company list I still have:

  1. Tips for your first real estate purchase
  2. Tips on the start-up process

The larger the company, the more tasks and resources have to be delegated.

Let’s start the sole proprietor and sole trader:

Sole trader / sole proprietor

The sole proprietorship is a German legal form which – as the name suggests – is founded and managed by a single person. This includes freelancers, small traders and registered traders. Would you like to become self-employed and learn more about the topic of “forms of business law and the real estate industry”? Learn everything you need to know about sole proprietorships here.

Registered businessman (e.K.)

Eingetragener Kaufmann (e. Kfm.) / Eingetragene Kauffrau (e. Kfr.) / Registered merchants (e. K.) – The registered merchants embody a German legal form variant, which is based on the corporate legal form of the sole proprietorship (EU). This is therefore a company that is founded and managed by a single person and is also obliged to be entered in the commercial register – hence the name.

Civil law partnership (GbR)

A civil law partnership is a German legal form established by two or more persons for a certain period of time in order to conduct a certain business together or to achieve a common goal. It is therefore always for a specific purpose and usually exists only as long as the joint venture has not yet been completed. As the name suggests, it is governed by civil law and is therefore often referred to as a BGB partnership. Would you like to join forces with other people and learn more about the topic of “forms of business law and the real estate industry” in advance? Learn everything you need to know about setting up a GbR here.

General partnership (OHG)

The general partnership is a German legal form founded by two or more persons and managed by at least one partner. As the name suggests, it is primarily geared towards commercial business and is thus subject to the German Commercial Code (HGB) in the legal sense. Would you like to join forces with other people and learn more about the topic of “business legal forms and the real estate industry” in advance? Let’s start, step by step, the OHG.

Limited partnership (KG)

The limited partnership is a German legal form founded by two or more persons and managed by at least one partner. The main feature of this legal form of company is the division of liability risk: at least one partner has unlimited liability and at least one partner has exclusive business liability with his contribution.

Entrepreneurial company (UG)

Unternehmergesellschaft / UG (haftungsbeschränkt) – The Unternehmergesellschaft (haftungsbeschränkt) is a German legal form based on the legal form of the Gesellschaft mit beschränkter Haftung (GmbH). It is considered to be the little sister of the GmbH and is therefore often referred to as the “mini-GmbH”. In principle, there are only minor differences between the UG (haftungsbeschränkt) and the GmbH from a legal perspective.

Limited liability company (GmbH)

GmbH, GmbH & Co KG, GmbH & Co OHG – 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 legal form of company is characterised by a limitation of liability for its shareholder(s). Everything you need to know about taxes and real estate trading.

Real estate GmbH / Asset management GmbH – Special

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.

Here still special case GmbH & Co KG, GmbH & Co OHG, no person GmbH, one person GmbH, two person GmbH and the organs of a GmbH.

GmbH & Co KG

GmbH & Co KG – The GmbH & Co KG is a German legal form which combines the corporate legal form of the limited partnership (KG) with a limited liability company (GmbH). Thus, the greatest advantages of both legal forms – the separation between general partner & capital provider typical for the KG plus the limitation of liability of the GmbH – intertwine and enable an innovative, new form of structuring for start-ups.

GmbH & Co OHG

GmbH & Co OHG – The GmbH & Co OHG is a German legal form which combines the corporate legal form of the general partnership (OHG) with a limited liability company (GmbH). Thus, the greatest advantages of both legal forms – the uncomplicated formation typical for the OHG as well as equality of all shareholders plus the limitation of liability of the GmbH – intertwine and enable an innovative, new form of organization for start-ups.

No-Person-GmbH

No-Person GmbH – The model for a GmbH without shareholders! By appointing new shareholders or leaving existing shareholders, the limited company 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 shareholders at all…. In each case, there are specifics that you should be aware of as they deviate from the norm of the traditional limited liability company.

One-person limited liability company

One-person GmbH – The GmbH model for solo founders! By appointing new shareholders or leaving existing shareholders, the GmbH model you have chosen can easily change.

Two-person limited liability company

Two-person GmbH – The GmbH model for founding duos! By appointing new shareholders or leaving existing shareholders, the GmbH model you have chosen can easily change.

Corporate bodies of a limited liability company

A limited liability company consists of several bodies. The managing directors deal with the day-to-day business and other matters of the company and represent their company externally in accordance with the GmbHG. The supervisory board is required by law above a certain number of employees and acts as a controlling body of the company by appointing and advising the management, but also by monitoring and, in case of doubt, dismissing it. Alternatively, its establishment can also be determined within the framework of the articles of association. The shareholders’ meeting acts as the decision-making body of the GmbH.

Stock corporation (AG)

Aktiengesellschaft (AG) – The stock corporation is a German legal form founded by at least one person and organized by different bodies. Instead of a managing director, the company is managed by a board of directors consisting of at least one person. As the name already indicates, this corporate legal form primarily stands for share trading.

In addition, the special case of real estate stock corporations (REIT-AG).

Real estate stock corporation (REIT-AG)

Real estate stock corporation / REIT-AG – You don’t find the idea of a stock corporation bad at all and are now wondering how you can combine your capital company with the real estate industry? A real estate company is a company that serves the financing, development, realization, leasing, or marketing of real estate – starting with a single property up to a real estate portfolio in the three or multi-digit range. The management of real estate property or third-party real estate on behalf of third parties can also be handled by a real estate company.

Types of shares

Types of Stocks – A corporation, as the name suggests, deals with stock trading. I’m sure you’ve heard that stocks can go up and down. You may also know someone who has invested their wealth in stocks. But what exactly is a share? In a nutshell, a share is a document that determines your entitlement to the share capital of a public limited company and guarantees you a fixed share of the profits. In this context, there is often talk of “securitising a claim”.

AG in detail: Management Board and Supervisory Board

The management board of a joint stock company deals with the day-to-day business and other matters of the company and represents the joint stock company externally.

The Supervisory Board is a legally prescribed self-monitoring body that appoints and monitors the individual members of the Management Board and, in case of doubt, also removes them. Furthermore, it is responsible for the written reporting of the annual financial statements as well as for business reports.

Annual General Meeting

The Annual General Meeting acts as the decision-making body of the stock corporation.

Limitation of liability for AG bodies

Limitation of liability for AG executive bodies – In the event of a loss, the stock corporation as a legal entity under private law is, to a certain extent, subject to a limitation of liability, because the liability – apart from a few rare exceptions – exclusively burdens the business assets of the company. In the external relationship, therefore, only the share capital is liable for any losses. In the internal relationship, however, the liability claim may vary depending on the governing body of the AG.

Societas Europaea (SE)

Societas Europaea (SE) – The Societas Europaea is a legal form that was introduced with regard to harmonization efforts at the European level. In German usage, the terms “Europäische Gesellschaft” or “Europäische Aktiengesellschaft” and Europa AG are therefore also commonly used. Characteristic features of a Societas Europaea are, above all, the simplification of cross-border business activities in EU member states and EEA countries through largely uniform legal bases and the personnel policy framework with regard to the co-determination rights of employees of the company.

Foundation / Family Foundation

Saving taxes with real estate – In this special article I will take a deep look into the subject of foundations, family foundations, real estate purchases, taxes and tax optimization. The establishment of a foundation, more specifically a family foundation has many advantages for you. From tax-free capital gains after speculation tax to low, 15 percent taxation of rental income. In this article you will learn how this works, how you can set up a foundation and how your grandchildren will still benefit from it.

Founding a company: Process, costs, requirements, legal forms – 7 steps checklist

You want to found your first company? Requirements for you as a founder, share capital, shareholder agreements, costs for the foundation, legal forms and checklists. This sounds complicated for beginners, but it is actually quite simple. The process of founding a company is usually relatively the same. I have summarized the foundation here once in simple steps, for you. Learn how to start your own business. After the great guide to all legal forms or types of companies, today a detailed look at the establishment of a (real estate) company for beginners.

Company formation in 7 steps: checklist

In the article you will find the foundation of a company explained in 7 simple steps. So you have a quick overview.

Checklist to start a company in 7 steps:

  1. Type of company: What should I start?
  2. Share capital: amount and forms of enterprise
  3. Company shares: Who brings / gets what?
  4. Shareholder agreement: Preparing the foundation and the business
  5. Notary: Arrange an appointment for the foundation
  6. Business account: Basis financial transactions
  7. Commercial register, trade, tax office and IHK

When setting up a company, you move from theory to practice, so to speak. First of all, of course, it’s about the type or structure of your company. Step one is very basic: you have to choose the right company for your (personal) construct. What factors influence the choice? The factors influencing the choice of company include: Share capital, number of founders or shareholders, liability criteria but also taxes. Learn more about founding a company in 7 steps here:

Tax for companies: Taxes in Germany

Buying your first real estate: Getting Started

The first property is your real “seed money”. A good location is the biggest advantage when it comes to returns.

So if you want to start your business, you need good real estate that will give you a solid return, which in turn will allow you to make new investments. To do this, you need to learn about the selection and purchase process: how do you find good properties and how do you buy them?

Location, valuation and appreciation

There is a world of difference between a condominium in Dortmund and luxury real estate in Hamburg. An apartment building in Braunschweig is easier to get hold of than a villa in Berlin-Grunewald. At the same time, the apartment building (as a type of property itself) is much harder to get than the condominium itself. So it’s not just apportionment, but also property type, i.e. house type and apartment type. Add to that time, do you need to buy something “right away” or do you have time to research and compare?

Your 3 key factors in buying:

  1. Location
  2. Property type / property
  3. Time

All this and more, must be included in the property valuation and this requires, depending on the type of property, location, demand and supply on site and also the purchase desire. Do you want to buy the property for your portfolio or do you want to live in the property yourself and sell or rent it later, after two, three or four years? Here again comes the value appreciation end game, especially of properties in very desirable locations, such as Berlin, Hamburg or Düsseldorf.

After the macro perspective, the micro perspective

After the macro perspective comes the micro perspective. What features does the property offer? And what construction costs were incurred? How does all of this affect the property, the land, and the future return on rent? From the carport for the modern family home, to the spa area for the luxury villa, all factors play into the property valuation.

After finding the right real estate, it is about the real estate valuation. The evaluation of house and apartment is very difficult, especially for beginners and beginners. Facts are, for example:

  • Construction costs of the object
  • Land value
  • Increase in value
  • Demand and supply (on site)

Evaluate and buy: More tips

Learn more about buying real estate here:

Here you will find more specific tips for each type of house and apartment:

]]> Immobilien GmbH – German Real Estate Loophole for Leasing, How-To Guide https://lukinski.com/immobilien-gmbh-german-real-estate-loophole-leasing-guide/ Tue, 03 Nov 2020 15:01:17 +0000 https://lukinski.de/?p=31308 Immobilien GmbH / Vermögensverwaltende GmbH / Immobiliengesellschaft – Let us help you optimize your taxes, and pay less for your German real estate. How to save money, by forming a so-called immobilien GmbH. You will learn the basics about the topic real estate company. When buying a house or a condominium, who comes up with the idea of founding a GmbH? Admittedly, it doesn’t make sense for self-interest, but it does for renting.

Additionally, in the following there may be slight grammatical errors, as this article was written by a German tax expert. This does not detract from the quality of information.

What is an Immobilien GmbH?

Definition Immobilien GmbH – An Immobilien GmbH is a real estate company. Meaning a company that pursues the purpose of leasing, development, financing, realization or marketing. It is independent whether it concerns one or several real estates. It also includes the property management, for its own properties and those of third parties.

Are you looking to save more on your property investment in Germany? Our full guide:

Tax Advantage: GmbH instead of Private

To cut a long story short, where is the advantage? With a tax rate of 42 percent, private leasing means you can quickly pay 4-digit sums a year in taxes. Below a comparison, once using a private ownership and once with a GmbH ownership.

Example: Calculation of Private Rental Income

Here a very simplified calculation, for a fast comparison of the taxation of private renting incomes compared with commercial incomes of a GmbH. No tax allowances and no solidarity surcharge are taken into account here either.

Simplified example calculation (private):

  • Monthly rental income: 1.000 Euro
  • Rental income / year: 12.000 Euro
  • Tax burden (income tax 42%): 5,040 Euro
  • Profit after taxes: 6,960 Euro

Example: Calculation of Commercial Rental Income

Here a very simplified calculation, for a fast comparison of the taxation of private renting incomes compared with commercial incomes of a GmbH. No allowances are taken into account here either.

Simplified example calculation (GmbH):

  • Monthly rental income: 1.000 Euro
  • Rental income / year: 12.000 Euro
  • Tax burden (corporate income tax 15%): 1.800 Euro
  • Profit after taxes: 10,200 Euro

The difference is here, in our simplified invoice:

+ 3.240 Euro / year

Real Estate Company or Familienstiftung?

Starting a Stiftung, aka Foundation, especially a family foundation, has many advantages for you. From tax-free capital gains after speculation tax to low, 15 percent taxation of rental income.

The big and central difference to the Immobilien GmbH, after the speculation period, you can sell your real estate tax-free. How this works, how you can set up a foundation and how your grandchildren will profit from it, you will learn in this article.

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