Real estate taxes
Leasing, Sale, Administration, Inheritance & Donation
Real estate such as houses, condominiums, commercial properties, building plots or agricultural and forestry land often form a substantial part of the assets. For this reason, it is obvious that the tax situation in connection with the administration, management or sale of real estate should be optimally designed.
Our tax advisors and attorneys for tax law provide competent and individual advice on all questions relating to the taxation of real estate:
- Sale and purchase of real estate: income tax, land transfer tax, value added tax
- Holding and management of real estate: depreciation, rental income, property tax, etc.
- Real estate in companies (partnerships and corporations)
- Real estate in the estate: Legal considerations
- Inheritance tax and gift tax: concessions for real estate
- Valuation of real estate for inheritance tax and gift tax: capitalized earnings value, comparative value, acquisition costs, production costs, etc.
- Tax arrangements in connection with the usufruct of real estate
- Calculation of return and redemption
For a non-binding inquiry please contact one of our contact persons directly by phone or e-mail or use the contact form at the bottom of this page.
The real estate in tax law
There are many possibilities for tax optimization in connection with land, houses, etc. This applies to financing, current taxation as well as to the transfer of real estate to the next generation - e.g. dressed in a company.
From a legal point of view, real estate is land that can be either developed or undeveloped. The taxation of these properties is regularly linked to events (e.g. sale) or use (e.g. rental). We offer advice in connection with the land transfer tax on real estate transfers and on tax issues related to the current income from renting and leasing. Only the property tax is linked to the ownership. Since there is no real estate tax law, the advising tax advisor must have knowledge of the different types of taxes and be able to apply them to situations involving real estate.
Overview of possible tax types
Real estate assets are therefore subject to different taxes. At a glance these are:
1. Income tax, corporate income tax
Depending on whether the property is held by a natural person, a partnership, a corporation or a foundation, the ongoing taxation of rental income is subject either to income tax or corporate income tax, with a clear distinction in the tax burden.
2. Real estate transfer tax
All real estate transactions are subject to real estate transfer tax. This applies in particular if the property is held by a company.
3. Sales tax
The letting of real estate is in principle sales tax-free. This tax exemption is not an advantage, but a disadvantage, at least for commercial tenants, since the landlord is not reimbursed the input tax from construction, repairs, administration. An option for sales tax should therefore be considered.
The sale of real estate is also generally VAT-exempt. When selling real estate rented out for VAT purposes, the input tax deduction of the last 10 years must therefore be secured by appropriate provisions in the transfer agreement, otherwise the tax office may face substantial tax claims.
4. Trade tax
The letting of real estate is subject to trade tax if the real estate belongs to a business asset. This is always the case if the letting is made by a corporation, but can also happen unnoticed by a so-called split-up of the business. In the case of companies that only manage their own real estate, the so-called extended reduction of real estate ownership applies, and trade tax is not applicable.
5. Inheritance tax, gift tax
The free transfer of real estate by way of inheritance or gift is generally subject to inheritance tax or gift tax. In this respect, however, there are numerous possibilities for structuring the transfer, which reduce the tax burden. Optimizations are also possible when filing the inheritance tax return or gift tax return, especially in questions of the tax valuation of houses, apartments and other real estate.
6. Property tax
Real estate tax is levied by the municipalities on both developed and undeveloped land. It is calculated from the so-called unit value, the real estate tax rate and the assessment rate levied by the respective municipality. The Federal Constitutional Court has declared the real estate tax to be unconstitutional and ordered the legislator to reorganize the real estate tax by the end of 2019.