Tax structuring for the
purchase and sale of real estate
When it comes to purchasing and selling real estate, tax-optimised structuring is crucial to maximising financial benefits and minimising tax encumbrances. We will provide you with comprehensive advice on the choice of the optimal legal form and transaction structure to reduce your tax burden. Our expertise will help you to navigate complex tax regulations and make your real estate investments efficient.
Real estate transactions
Real estate transactions may involve the purchase or sale of real estate. The transaction may be carried out either by directly transferring the real estate (asset deal) or by transferring the shares of a company in which the real estate is held (share deal). Careful advance planning at the time of acquisition of the property can optimise the tax situation with regard to current income and future capital gains. For example, under current legislation, property held as private assets can be sold tax-free after a period of ten years. By contrast, properties held via companies can benefit from trade tax exemptions (see separate point on extended trade tax reduction). Tax optimisation may lead to increased reinvestment potential. When structuring real estate transactions, we will identify how your individual objectives can be achieved in the most tax-efficient way.
Real estate transfer tax
Real estate transfer tax may regularly be incurred in the context of the purchase and sale of real estate. This applies both to the transfer of the real estate itself and to the transfer of shares in the company if real estate is part of the company's assets. The underlying legal provisions are constantly changing, but there is still potential for structuring the transaction in such a way so as to avoid or at least reduce the encumbrance caused by real estate transfer tax.
Our experts for property tax law
Trade tax
Trade tax can be highly relevant in the context of real estate taxation at both the private and corporate level of taxpayers. In the case of directly held real estate as private assets, commercial property trading can be assumed if – in addition to other conditions – more than three properties are sold within a certain period of time. At the company level, however, relief with regard to the trade tax burden can be achieved by means of the so-called extended trade tax reduction.
Due diligence
Furthermore, tax due diligence and/or financial due diligence may be advisable, particularly when acquiring real estate companies (share deal). Analysing the tax risk areas of the company to be acquired, as well as the current financial situation and planned financial development may help to avoid unpleasant surprises when acquiring a company.
