Tag: Around real estate

Whether it’s international DJs at weddings, foreign technology companies for conferences or licence fees to franchisors abroad – many hotels and restaurants are now part of international service and contract structures. What many people don’t know is that this can lead to tax risks and potential payment obligations. The reason: Section 50a of the Income Tax Act (EStG).

The tax classification of real estate that is used for both business and private purposes is a complex issue in practice that is often overlooked. Tax classification is particularly important for mixed-use real estate, as it determines the tax treatment of acquisition and production costs, depreciation and subsequent capital gains tax.

The construction withholding tax is an important measure aimed at preventing tax evasion and illegal working practices in the construction industry. The recipient of the construction service, e.g. the landlord who purchases the construction work, must therefore pay 15% of the invoice amount directly to the tax office in certain cases.

The conditions for building new homes have become extremely difficult: rising material prices, high manufacturing costs and, most recently, massive increases in construction interest rates are putting a heavy strain on residential construction. Nevertheless, investing in rental housing can still be worthwhile – tax depreciation options play a key role here.

Often, property or real estate assets are held either as private assets or in partnerships. A less common, but potentially advantageous option for larger real estate assets is to hold them in a limited liability company. This alternative offers interesting tax perspectives and structuring options.

Many property owners have now received their local property tax assessment and are shocked to find that the property tax payable from 2025 has increased many times over in some cases. How can this be and what options do property owners have? This article explains the most important aspects of the property tax reform with a focus on Bavaria.

What should you bear in mind for income tax purposes when selling property as a private asset? Unfavorably chosen constellations can also have far-reaching consequences for you in the future.

In principle, the increase in value of real estate is subject to income tax at the individual personal tax rate,

In 2023, homeowners and prospective property owners in Germany will have a wide range of opportunities to take advantage of financial incentives for energy-efficient construction and renovation. Families in particular will benefit from new KfW programs offering low-interest loans and extended credit terms. These support measures are part of a comprehensive strategy to promote sustainable real estate projects and environmental protection.

When modernizing a home or changing ownership, the question arises as to what subsidy options or tax benefits are available and how they can be claimed.

Would you like to get an overview of the BEG individual measures grant, tax simplification for photovoltaic systems and new regulations for sales tax?

Often, a property must be sold in its entirety as part of a divorce, or one ex-spouse sells his or her co-ownership share to the other ex-spouse. The problem: if a property is sold as private assets within the so-called holding period, taxes may have to be paid on it because it may be a private sale transaction.

Further update 31/01/2023: In Bavaria, the deadline for submitting property tax returns is extended to the end of April.

In the Free State of Bavaria, property and land owners now have a further three months to submit their property tax returns. This was decided at short notice in the cabinet on 31.1.2023.

In connection with the property tax reform, many property owners receive the property tax assessment notices from the tax office.

In Bavaria, in addition to the “notice of the property tax assessment amount”, a “notice of the property tax equivalent amounts” is also issued.

Since 2020, energetic renovation measures on the owner-occupied home have been eligible for tax incentives for ten years. Corresponding expenses can be deducted directly from the tax liability.

• Which measures are subsidized?
• What should be considered?
• What alternative funding options are there?

Our experts around the property give you tips and answers to 10 questions from the practice of tax incentives for energy refurbishment of your home,

n principle, craftsmen’s services on properties used for one’s own residential purposes are only taken into account for tax purposes to a very limited extent.

However, if one observes important prerequisites, plans the measures accordingly and provides the necessary evidence, renovation costs can certainly be deducted from tax.