From a single property to a portfolio.

Private ownership, an asset-managing company and a commercial structure differ fundamentally in ongoing taxation, in the treatment of capital gains and in the options for a later transfer. We analyse your starting position and your goas a and develop the structure that carries not just today but across the entire planned holding period – before the purchase agreement is signed.

• Structuring advice before acquisition: weighing private ownership against asset-managing and commercial structures
• Tax burden comparisons for the various acquisition forms – ongoing taxation, sale and transfer in one overall view
• Assessment of the income, trade, corporate and value-added tax consequences of each structure
• Tax evaluation of the financing structure and the treatment of interest
• Delineation between private asset management and commercial activity
• Tax support for allocating the purchase price to land, buildings and movable assets as the basis for depreciation
• Coordinating the structure with your notaries and financing partners

We record rental income, operating costs and property-related expenses in a structured, digital way, allocate them to the right properties and prepare them for tax evaluation. We work closely with your property manager: they handle the commercial and technical management of your properties, we mirror the relevant data into clean tax records. Management and tax mesh smoothly.

• Structured, digital recording of rental income and property-related expenses
• Per-property evaluations as the basis for income determination and your own overview
• Importing and processing the relevant data from your property manager's statements
• Clean allocation of expenses to maintenance versus production costs already at the recording stage
• Preparing the data for the German rental income schedule (Anlage V) and the annual accounts of property companies
• Reconciling the recorded data with your property manager and financing partners
• Digital document and data exchange for an efficient, location-independent process

Determining income from letting follows rules of its own, and depreciation in particular offers substantial room for structuring: from regular building depreciation to declining-balance and special depreciation for new rental housing through to increased depreciation for listed buildings. At least as important is the line between immediately deductible maintenance costs and production costs that can only be written off over the useful life – a distinction that can decide the tax burden of an entire year and one the tax authorities examine closely. We determine your income carefully and use the permissible depreciation options consistently.

• Determination of rental income (sec. 21 German Income Tax Act) for individual properties and entire portfolios
• Optimising building depreciation – straight-line, declining-balance and special depreciation within the legal options
• Review of increased depreciation for listed buildings and buildings in redevelopment areas (secs. 7h, 7i German Income Tax Act)
• Sound delineation of immediately deductible maintenance costs from capitalisable production costs – including acquisition-related production costs (sec. 6 (1) no. 1a German Income Tax Act)
• Consideration of financing costs, income-related expenses and rental losses
• Review of the intention to generate income – particularly with below-market letting and holiday homes
• Preparation of the rental income schedule (Anlage V) and coordination with the owners' wider tax affairs

Held privately, the ten-year period of sec. 23 German Income Tax Act decides whether a capital gain remains tax-free; special relief applies to properties used as your own home. Those who buy and sell more frequently and in close succession, however, quickly approach commercial property trading – the tax authorities apply the so-called three-object rule. Once the line to commercial status is crossed, the consequences change fundamentally: capital gains become taxable, trade tax arises, and even previously tax-free properties can become 'infected'. We check early on which side of this line you stand and structure sales so that there are no unpleasant surprises.

• Review of the tax exemption for private disposas a and the ten-year period (sec. 23 German Income Tax Act)
• Assessment of the exemptions for owner-occupied use
• Determination of the taxable capital gain including subsequent acquisition and production costs
• Early detection and avoidance of unintended commercial property trading – evaluation of the three-object rule and its exceptions
• Tax support for purchases, sales and project developments
• Assessment of the consequences of withdrawing or contributing properties between private and business assets
• Tax planning of the sale date with regard to deadlines and progression

Particularly with commercial letting, it can therefore pay to opt for VAT liability (sec. 9 German VAT Act) and thereby secure the input tax deduction. This decision, however, is tied to strict conditions, binding for the long term and carries the risk of an input tax adjustment over ten years (sec. 15a German VAT Act) if the use later changes. We check for each property whether the option makes sense – and ensure the input tax deduction holds up over the years.

• Review of the merits of opting for VAT on letting (sec. 9 German VAT Act)
• Securing input tax deduction on acquisition, production and maintenance costs
• Monitoring the conditions for an effective option, particularly for mixed-use properties
• Calculating and monitoring input tax adjustments over the ten-year period (sec. 15a German VAT Act)
• VAT evaluation of transfers of a going concern when selling let properties
• Assessment of the VAT treatment of construction services and reverse charge (sec. 13b German VAT Act)
• Preparation of advance VAT returns and annual VAT returns for your property activities

Gifting and inheriting property are subject to German inheritance and gift tax, whose level depends heavily on the valuation of the property, on allowances and on the chosen structure. Transferring wealth during your lifetime and in several steps allows allowances to be used repeatedly and reduces the burden considerably; usufruct and transfers with reserved rights open up further room. Together with you – and in close coordination with your lawyers and notaries – we develop a transfer strategy that carries your real estate wealth gently into the next generation while securing your own provision.

• Tax-optimised planning of property transfers during lifetime and on death
• Using inheritance and gift tax allowances through forward-looking, staggered transfers
• Tax evaluation of usufruct and reservation solutions as well as transfers against maintenance payments
• Assessment of property valuation for inheritance and gift tax purposes
• Review of reliefs for let residential property and for real estate held as business assets
• Preparation of inheritance and gift tax returns
• Coordinating the tax structuring with the inheritance and corporate law implementation by your lawyers and notaries