Transferring private real estate to a GmbH
Tax optimisation & asset protection with Lüders Warneboldt
Incorporating private real estate into a limited liability company (GmbH) offers property owners, investors and company founders considerable tax advantages and better asset protection. This structure allows you to optimise your taxation and manage your properties more efficiently.
The transfer of private real estate to a GmbH is an effective solution for minimising tax burdens and taking advantage of legal benefits. Lüders Warneboldt supports you with comprehensive expertise in tax and legal advice in order to develop the best strategies for your incorporation.
Let our interdisciplinary team at LW-P Lüders Warneboldt advise you! Contact us and find out how you can best incorporate your private property into a limited company.
What does it mean to contribute a property to a GmbH?
Transferring a property to a limited liability company means that you transfer ownership of your private property to a limited liability company or immediately establish ownership from the limited liability company upon purchase. This GmbH can be newly founded or already exist. You become a shareholder of the GmbH and receive shares.
The procedure is as follows:
- Formation or selection of a GmbH: Check whether an existing GmbH is to be used or a new one formed.
- Transfer of the property: Notarised contract, e.g. to transfer the property in exchange for shares or by sale.
- Entry in the commercial register: Changes to the ownership structure are entered in the commercial register.
Lüders Warneboldt accompanies you throughout the entire process and provides comprehensive advice on legal and tax aspects.
Why a limited company for property?
The use of a limited liability company (GmbH) for real estate offers numerous advantages over a partnership, such as a GbR or OHG. A real estate GmbH enables efficient tax optimisation, legal advantages and professional property management.
How does the transfer of real estate to a GmbH work?
Your path to becoming a property company: step by step to success
- Individual advice and strategic planning: Together with experts, you analyse your goals and develop a tailor-made strategy for the transfer or acquisition of your property into a GmbH.
- Formation or utilisation of an existing GmbH: Check whether an existing GmbH can be used or whether it makes sense to form a new GmbH. Take tax and legal aspects into account.
- Preparation of the transfer agreement: A notarised agreement regulates the transfer of the property to the GmbH. For example, you can choose whether you want to contribute the property in exchange for shares or sell it to the GmbH.
- Notarisation and commercial register: The contribution agreement is notarised and the transfer of ownership is entered in the commercial register.
- Tax registration and other formalities: After registration, various tax filings and other formalities are required to ensure that all tax obligations are met and income is correctly declared.
Contribution in exchange for shares or sale?
- Contribution in exchange for shares: Here you receive shares in the limited company in return for your property. This can offer certain tax advantages.
- Sale to the GmbH: In this case, you receive the agreed purchase price in cash. This option can be useful if you need liquidity or are pursuing other tax objectives.
Save taxes with a real estate limited liability company: structuring options & tips
The tax aspects of transferring real estate to a GmbH are complex and require careful planning. Real estate transfer tax in particular can represent a considerable burden. However, there are various structuring options to reduce or even completely avoid this tax burden.
One way to avoid real estate transfer tax is to contribute the property to a limited liability company in exchange for company rights. In this case, the property is not sold to the GmbH but contributed in return for new shares. This process is exempt from real estate transfer tax under certain conditions in accordance with § 21 UmwStG.
Real estate transfer tax is generally payable when a property changes hands. However, the transfer to a GmbH is not a classic acquisition within the meaning of the Real Estate Transfer Tax Act. Instead, the property is transferred to the assets of the company and the previous owner receives shares in this company in return.
Strategies for minimising real estate transfer tax:
In addition to the tax-free transfer, there are other strategies to minimise real estate transfer tax when transferring a property to a GmbH:
- Gradual contribution: The property is not contributed all at once, but in several stages.
- Contribution at book value: The property is not contributed at market value, but at the lower book value.
- Reservation of usufruct: The transferor retains a usufructuary right to the property.
Transferring real estate to a GmbH can also offer advantages in terms of inheritance tax. Through skilful structuring, you can reduce the tax burden for your heirs and ensure a smooth transfer of your property assets.
Advantages of transferring property to a GmbH with regard to inheritance tax:
- Make targeted use of tax allowances: When transferring GmbH shares, tax allowances can be utilised in a targeted manner.
- Organising company succession: Transferring shares to a GmbH facilitates succession planning, as the shares can be transferred more easily and flexibly.
- Right of usufruct: By reserving a right of usufruct, the transferor can continue to benefit from the property while ownership is transferred to the GmbH.
Tips for optimisation:
- Early planning: timely and careful planning of the transfer can maximise tax benefits.
- Seek advice: Seek comprehensive advice from experts such as Lüders Warneboldt to develop the best strategies for your individual situation.
- Adapt articles of association: Adapt the articles of association of the GmbH to secure tax advantages and avoid legal pitfalls.
In addition to the classic GmbH, the GmbH & Co. KG is also a suitable company form for real estate. In this legal form, the GmbH is the general partner and therefore the managing partner of the KG. The limited partners(private individuals or other companies) only have limited liability.
Advantages and disadvantages of both models at a glance
Ltd:
- Liability: Limited to the company assets of the GmbH.
- Management: By the managing director (can also be a shareholder).
- Profit distribution: According to articles of association.
- Taxation: Corporation tax, trade tax (if not covered by tax-free allowance).
- Formation costs: Lower than for GmbH & Co. KG.
- Administrative expenses: Lower than for GmbH & Co. KG.
GmbH & Co. KG:
- Liability: GmbH has unlimited liability, limited partners have limited liability.
- Management: By GmbH as general partner.
- Profit distribution: According to the articles of association, usually fixed participation of the limited partners.
- Taxation: Corporation tax at the level of the GmbH, income tax at the level of the limited partners (in the case of natural persons). Trade tax only on the GmbH’s share of profits.
- Formation costs: Higher than for a GmbH.
- Administrative expenses: Higher than for a GmbH.
Talk to the experts at Lüders Warneboldt to develop the optimum strategy for your property company. Contact us for a non-binding initial consultation.
Real estate GmbH: risks & disadvantages at a glance
Although a property company offers many advantages, you should also be aware of the potential disadvantages and risks in order to make an informed decision:
- Formation costs and ongoing administrative expenses: the formation of a GmbH involves costs, e.g. for notary fees, entry in the commercial register and tax advice. The ongoing operation of a GmbH also incurs costs, e.g. for bookkeeping, annual financial statements and tax returns.
- Limited private use: If the property is transferred to the GmbH, it belongs to the GmbH. Private use is possible, but must be clearly regulated and taxed in order to avoid tax disadvantages.
- Tax pitfalls: The tax regulations for GmbHs are complex. Errors in organisation or processing can lead to unexpected additional tax payments. One example is the hidden profit distribution, where inappropriate benefits for shareholders can be recognised as a profit distribution.
Minimise risks with Lüders Warneboldt
Lüders Warneboldt supports you in carefully weighing up the advantages and disadvantages of a property limited company. We advise you comprehensively on the possible risks and develop strategies to minimise them.
Our experts will analyse your individual situation and show you which structuring options are best for you. This way, you can be sure that the transfer of your property to a GmbH will be a success.
Costs and expenses of a real estate GmbH
Setting up and managing a property company involves various costs and a certain amount of time.
Costs incurred:
- Notary fees: Fees for the notarisation of the articles of association and the property transfer, depending on the value of the property and the scope of the notarial work.
- Formation costs: Fees for entering the GmbH in the commercial register and possible costs for advice from lawyers or tax consultants.
- Ongoing costs: Regular costs for bookkeeping, annual financial statements, tax returns and possibly the management of the property.
- Tax consultants: Fees for the preparation of tax returns and tax optimisation.
- Legal fees: Costs for legal advice and contract drafting for more complex issues.
Time expenditure and administrative requirements:
- Formation process: time and care for drawing up the articles of association, notarisation and registration with the commercial register.
- Notarisation and commercial register: Time required for notarisation of the contribution agreement and registration of the GmbH.
- Ongoing administration: Regular administrative tasks such as bookkeeping, tax returns and compliance with legal requirements.
Legal aspects of transferring real estate to a GmbH
The transfer of a property to a GmbH is a legally complex process that involves various aspects:
- Notarisation: The contribution agreement must be notarised in order to be legally valid.
- Commercial register: The GmbH must be entered in the commercial register in order to be able to act as a legal entity.
- Corporate law issues: If there are several shareholders, the articles of association must contain clear regulations on management, distribution of voting rights and distribution of profits in order to avoid later conflicts.
Personalised advice on real estate GmbH at Lüders Warneboldt
Lüders Warneboldt offers comprehensive expertise in the areas of tax advice, legal advice and auditing. Our interdisciplinary team of over 110 experts in Hanover and Lehrte works hand in hand to offer you customised solutions for the transfer of your real estate into a GmbH.
We support you throughout the entire process – from strategic planning and tax-optimised structuring through to legal protection. Our aim is to support you as a reliable partner in the long term and enable you to maximise the benefits of your real estate GmbH.
Our strengths:
- Tax expertise: We optimise the tax structure of your Immobilien-GmbH and minimise your tax burden through individual structuring options.
- Comprehensive legal advice: We draft and review all relevant contracts and ensure the legal security of your property investment.
- Holistic support: At Lüders Warneboldt, the client takes centre stage. We offer you personal support and develop customised solutions that are precisely tailored to your needs and objectives.
Your success is our goal!
You can rely on our many years of experience and our interdisciplinary expertise. We have grown with our tasks and have developed from a law firm into a specialised consultancy firm. Contact us for a no-obligation consultation and find out how we can support you in successfully transferring your property to a limited company.
FAQ - Frequently asked questions about bringing private property into a limited company
A property GmbH is worthwhile for every investor and every private individual with several properties. This allows tax advantages to be utilised and private property to be protected. However, there is no exact limit, as this depends on individual factors.
Yes, this is generally possible. The GmbH acquires the property and you conclude a rental agreement with the GmbH as a shareholder-managing director. It is important that the rental payments are customary for the location and that the rental agreement corresponds to the usual conditions in order to avoid a hidden profit distribution.
Rental income from a GmbH is subject to corporation tax (15%) and, if applicable, trade tax. Depreciation on the building and other operating expenses can reduce the tax burden. When profits are distributed to the shareholders, for example, capital gains tax (25% plus solidarity surcharge and, if applicable, church tax) is also payable.
Yes, the acquisition and management of property is one of the main purposes of an asset-managing GmbH. This form of company is particularly suitable if you own several properties or regularly carry out property transactions.
You need at least one shareholder, a notarised partnership agreement, entry in the commercial register and a minimum share capital.
No, a GmbH cannot let property to itself. However, it can let properties to its shareholders or to third parties.
