Real Estate

The German real estate market remains attractive for investors from abroad. Our Real Estate team, which specializes in real estate, supports you in all tax matters relating to your property investment, especially in international structures. On this page we have summarized some important information on the rental, leasing, and sale of real estate in Germany. Feel free to Contact Us by email or phone — we will be happy to help.

Examples from our advisory practice:

• Commercial or private letting of holiday apartments in metropolitan areas or holiday regions
• International real estate investments Germany–Denmark via partnerships — typically K/S or GmbH & Co. KG — or corporations — usually via ApS, A/S or GmbH
• Tax advisory services for international publicly listed real estate companies
• Private and commercial rental or leasing of real property

Tax-Free Sale, Real Estate Corporations and Real Estate Transfer Tax

In many situations, taxes are among the decisive factors. We help you set the right tax course, avoid potential tax risks, and take advantage of tax opportunities:

• Tax-free sale despite depreciation for privately held real estate:
  In Germany, real estate held as private assets can, under certain conditions, be sold completely tax-free after 10 years. At the same time, depreciation can still be used for tax purposes and thus reduce income from letting and leasing.
• Real estate corporations as a tax-saving model:
  If corporations own real estate, they may, under certain circumstances, have to tax profits from rental income and sale at only 15%. This generally applies to German companies (e.g., GmbH) and Danish companies (e.g., ApS). The funds saved can, at company level, for example be used to acquire additional properties or to repay loans. A holding structure may also be possible in this context.

German real estate transfer tax (Grunderwerbsteuer): In an increasing number of German federal states, real estate transfer tax is being raised to the maximum rate of 6.5%. At the same time, the possibilities for tax-free transfers — e.g., in the context of so-called ‘’share deals’’ — are being significantly restricted. Within this field of tension, we find solutions.

„Extended Deduction“ for Trade Tax (Gewerbesteuer)

Another topic involving many challenges in real estate taxation is German trade tax, particularly the so-called “extended deduction” (erweiterte Kürzung). As a rule, income from letting and leasing is not subject to trade tax — but this requires that the conditions for the extended deduction are met.

In principle, the extended deduction applies to companies that exclusively manage their own real estate.

When selling a property, certain conditions must be complied with so that the extended deduction also applies to any capital gains from the sale. We are happy to support you with your exit.

We Take Care of Your Tax Matters

As German tax advisors, we are happy — upon request — to take over all tax obligations connected with your property in Germany.

These tax obligations primarily affect the (German or Danish) real estate company, which, for example, must prepare annual financial statements and file tax returns. If the investment is made via partnerships, Danish investors are also directly affected by tax obligations. For this purpose, we have developed our investor management service. If desired, we also handle the investors’ tax obligations and communicate with the German tax authorities on their behalf.

As German tax advisors, we see ourselves as an intermediary between Denmark and Germany and often act as the link between the German administrator, the real estate company, investors, the Danish auditor, and the tax office. Based on our experience with Danish tax law, we can reduce misunderstandings and build bridges.

International Optimization Germany-Denmark

Tax optimization for international real estate investments should not stop at the border. Even if a structure is optimal under national law, that does not necessarily mean it is the best alternative when viewed internationally as a whole. That is why our analysis is always holistic and cross-border, and also takes into account the provisions of the Germany–Denmark Double Taxation Agreement.

We help you step by step to develop a structure tailored to your situation and tax-efficient.