Holding real estate through a GmbH can be tax-efficient -- but it does not have to be. We compare the tax implications and show when a real estate GmbH is worthwhile.
The Question of the Right Legal Form
The decision to hold real estate as private assets or through a GmbH has far-reaching tax consequences. There is no one-size-fits-all recommendation.
Taxation as Private Assets
Ongoing Income
Rental income is taxed as income from letting and leasing pursuant to § 21 EStG at the progressive income tax rate (up to 42 or 45 per cent).
Capital Gains
In private ownership, capital gains are completely tax-free after the expiry of the ten-year speculation period pursuant to § 23 EStG.
Taxation in a GmbH
Ongoing Income
The overall tax burden is approximately 30 per cent. The extended trade tax reduction pursuant to § 9 Nr. 1 Satz 2 GewStG can reduce the trade tax to virtually zero.
Capital Gains
Capital gains are subject to corporate income tax and trade tax regardless of the holding period. A tax-free disposal after ten years is not possible.
Comparative Calculation
With 100,000 euros in net rental income and 40,000 euros in costs: Private ownership (42 per cent): approx. 25,200 euros in tax. GmbH with extended reduction (approx. 15.8 per cent): approx. 9,480 euros. Upon disposal after 15 years with a 200,000 euro increase in value: private ownership is tax-free; GmbH results in an overall burden of approx. 95,000 euros.
When Is a GmbH Worthwhile?
Advantageous for long-term profit retention, large portfolios and succession planning via company shares. Disadvantageous when disposal after ten years is planned, for owner-occupied property and small portfolios.
Special Case: Asset-Managing GmbH
Even minor ancillary commercial activities jeopardise the extended trade tax reduction. Short-term furnished lettings or management services for third parties can be detrimental.
VAT Aspects
Residential letting is VAT-exempt (§ 4 Nr. 12a UStG). For commercial properties, opting for VAT (§ 9 UStG) is possible, which enables input tax deduction on construction costs.
Conclusion
Only a comprehensive analysis yields reliable results. At compleneo, we prepare individual comparative calculations and advise on the tax-optimal structuring of your real estate holdings.
