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German Property Investment Tax Home

August 28th, 2010 at 8:10

We know there are more pages of the German tax code that most other countries combined, it is possible to simplify questions and some return on investment, much easier to understand. This statement was expected to support with the first questions about taxes. The purpose of this memorandum is not a substitute for the work of a local accountant, the more you focus on your questions you ask.

Types of taxes:

Overall, is subject to tax in the following areas: local sales tax or property on the ground income tax or corporation Capital

Tax gain back then: Sale

This is a collection of apartment is fixed, no matter the price. Over the whole of Germany, except the tax of 3.5% in Berlin and Hamburg, the tax under 4.5%, clearly a good way to supplement the coffers of the city! Sales tax, stamp duty or VAT-free, it would be a little hard to be different, and is payable at the end of the transaction. It is customary for the notary supervised a contract for this complaint 14 days after the conclusion of the contract, so everything is in place before the end and there are no raids. Tax

Local land and property

This tax is usually done in each district of the city, and the land value of the base [typical examples]. The tax is levied on the estimated value of the basic federal rate of 0.35%. The amount is multiplied by coefficients to calculate the local final tax. The coefficient varies with the local municipality, but the average rate is 1.9%. It is paid for this tax in the low cost of rent paid by tenants as effectively and not be included in the rental income as long as property held in common. If the property is unoccupied, the tax is liable to the landlord. As an example of a property with an estimated value of 100,000 euros:

value = 100,000 €
annual base = 0.35% Levy
tax base = 350 € per year or 87, 50 € per quarter

Remember that thing is indeed living in the unit, actually paid the expenses of the tenant, not a cost directly to the owner’s return quoted on an investment.

Returns tax or corporation tax

Depending on how an investment is structured so that you will be liable to any person or entity producing tax net. In both cases, there are a number of concessions on income, including: finance

The value of all investment cons [but not the capital repayment element] cost of maintaining the property, including maintenance costs and other items verbunden.Die current investments such as trips to the ownership and management arise for depreciation


Here is a great achievement has been made for the notional value of a loss of property because of his age. The depreciation of the building permitted for buildings with land amounting to 70% on the cost of ownership. 2% depreciation per year for houses built since 1925 and registered 2.5% in real estate before 1925.

Corporation tax is a question, the best advice is to look, but in most cases, 25% is the income level determined after all allowances.

Control structures

It is a common issue to a new investor, as it should ensure the structure of investment vehicle, it is effective for tax purposes. The center of choice around the purchase of specific property or the structure of the company. First, it is important to note that the financing of the property is little difference, to use the structure. Security against the property and the income and capital positions of individuals or persons who are taken after analysis of a company. Thus, there are some limitations to this page. To be considered for this purpose, the aspects are:


amount of income you expect to receive in Germany, he should start a business or personal tax rates are less expensive?

What are the costs of starting a business, and annual operating costs of deposit accounts?

What are the differences with the responsibility of maintaining the property under a business as opposed to an individual?

Are there any aspects related to capital gains or inheritance, the impact on your plans?

It is really advisable to seek professional advice on these points. We have established a number of tax advisers to help international investors, so please call if you need this service.

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