Asset-Managing GmbH for Real Estate: Formation, Transfer and Costs
Many landlords consider holding their flats through a GmbH rather than privately. Most people then speak of an asset-managing GmbH (vermögensverwaltende GmbH). Here we mean a GmbH for real estate, not a GmbH for securities. We state the basic tax rules with their legal source. How they apply in your case is for your tax adviser to assess.
Table of contents
At a glance – asset-managing GmbH
- Not a separate legal form: An asset-managing GmbH is an ordinary GmbH that manages its own assets, for example rented flats.
- Tax on rents: The GmbH pays 15 percent corporation tax plus solidarity surcharge on its rental profit, 15.825 percent in total (until 2027). From 2028 the rate falls by one point each year, to 10 percent in 2032 (section 23 (1) KStG). Trade tax on rental income only falls away if the extended reduction applies.
- Sale from the GmbH: Gains from selling a property are always taxable in the GmbH. The ten-year period only applies to private assets.
- Formation: The notary notarises the articles of association; the share capital is at least 25,000 euros. The worked example below shows what formation costs.
- Transfer: Anyone who transfers their own property to the GmbH needs a notarised agreement and pays 6 percent real estate transfer tax in Berlin. The exemptions for spouses, children and partnerships do not apply to the GmbH.
- Income tax: If you bought the property no more than ten years ago, the transfer can trigger income tax. Clarify this with your tax adviser beforehand.
What is an asset-managing GmbH?
An asset-managing GmbH is not a separate legal form. It is an ordinary GmbH whose purpose is managing its own assets, here rented property. For tax purposes, the law treats every GmbH in full as a commercial business (section 2 (2) GewStG, section 8 (2) KStG). The term “asset-managing” matters for tax mainly in trade tax, for the extended reduction.
Property GmbH, holding, partnership: the terms
“Property GmbH” is another name for the same model. A holding is a GmbH that holds shares in other companies. More on this on the page Set up a holding company. A GbR or a GmbH & Co. KG, on the other hand, is a partnership with different tax rules. For a comparison of the legal forms, see the article on choosing a legal form.
Property privately or in a GmbH: differences, pros and cons
The table shows the main differences.
| privately | GmbH | |
|---|---|---|
| Tax on rental profit | personal income tax rate | 15.825% corporation tax and solidarity surcharge (until 2027), with the extended reduction no trade tax on it |
| Sale after ten years | tax-free (section 23 EStG) | always taxable |
| Using the money privately | directly available | via distribution, subject to withholding tax |
| Liability | personal, with all your assets | towards creditors only the company’s assets (section 13 (2) GmbHG) |
| Formation and formalities | none | articles of association before a notary, commercial register, Transparency Register |
| Ongoing effort | Annex V of the tax return | bookkeeping, annual accounts, publication, separate tax returns |
| Inheriting and gifting | flats, 10% reduction for rented flats (section 13d ErbStG) | GmbH shares, relief for business assets usually excluded |
| Moving from private to the GmbH | – | 6% real estate transfer tax in Berlin, income tax where applicable |
As long as profits stay in the GmbH, no tax on distributions is due. Once the GmbH distributes them, withholding tax comes on top; the worked example below shows the effect. Whether the GmbH is cheaper overall depends mainly on your personal tax rate, the distributions and the ongoing costs. Anyone who transfers an existing property pays real estate transfer tax once and possibly income tax.
What taxes does an asset-managing GmbH pay?
The GmbH pays corporation tax with solidarity surcharge on its taxable profit and, in principle, trade tax. Trade tax can fall away for the profit from letting. Distributions to the shareholders incur additional tax.
Corporation tax: 15 percent until 2027, then falling
In 2025 the Bundestag decided to reduce corporation tax gradually from 2028 (section 23 (1) KStG). The solidarity surcharge is 5.5 percent of the corporation tax (section 4 SolZG).
| Year | Corporation tax | with solidarity surcharge |
|---|---|---|
| until 2027 | 15% | 15.825% |
| 2028 | 14% | 14.77% |
| 2029 | 13% | 13.715% |
| 2030 | 12% | 12.66% |
| 2031 | 11% | 11.605% |
| from 2032 | 10% | 10.55% |
Trade tax and extended reduction
In Berlin the multiplier is 410 percent. With the base rate of 3.5 percent, this gives 14.35 percent trade tax (section 11 (2), section 16 GewStG). A GmbH has no tax-free allowance. Without the reduction, the burden on rental income is therefore around 30.2 percent (until 2027).
On application, a GmbH can reduce the part of its trade income that relates to managing and using its own real estate (section 9 no. 1 sentence 2 GewStG). The condition is that it exclusively manages and uses its own real estate; it may also manage its own capital assets. Interest from these capital assets remains subject to trade tax.
Other activities can cost the entire reduction, even if they are small or generate no income. These statutory exceptions matter for landlords (section 9 no. 1 sentence 3 GewStG):
- other income from contracts with the company’s own tenants up to 5 percent of the rental income
- income from electricity up to a combined 20 percent of the rental income: from renewable energy, if supplied to the company’s own tenants, and from charging stations for electric cars and e-bikes
The profits from this ancillary income remain subject to trade tax. The GmbH must calculate the profit from letting separately for this purpose (section 9 no. 1 sentence 4 GewStG).
The law excludes the reduction if the property serves, in whole or in part, the commercial business of a shareholder, for example their sole proprietorship (section 9 no. 1 sentence 5 GewStG). Letting to other companies of the same shareholders may involve further grounds for exclusion. Whether the reduction applies depends on what the GmbH actually does.
Distribution to the shareholders
If the GmbH distributes profits, 25 percent withholding tax plus solidarity surcharge is due, 26.375 percent in total (section 32d (1) EStG). The GmbH withholds and pays the tax. Anyone holding at least 25 percent can apply for the partial income method instead. This also applies from a 1 percent holding if the person has significant influence on the GmbH through their professional work for it (section 32d (2) no. 3 EStG).
An example for 2027. It assumes that the extended reduction applies, the GmbH distributes the entire profit, withholding tax applies, the saver’s allowance has been used up and no church tax is due.
| Step | Calculation | Amount |
|---|---|---|
| Rental profit of the GmbH | €1,000.00 | |
| Corporation tax and solidarity surcharge | 15.825% | €158.25 |
| Distribution | €841.75 | |
| Withholding tax and solidarity surcharge | 26.375% | €222.01 |
| After tax for the shareholders | €619.74 |
The tax burden in this case is around 38 percent.
Selling a property from the GmbH
Privately, the gain from selling a rented property is tax-free after ten years (section 23 EStG). This does not apply to the GmbH. If it sells a property, the gain is always subject to corporation tax (section 8 (2) KStG). Whether trade tax is also due depends, among other things, on whether the extended reduction applies in the year of sale.
The tax rules here are an outline. Your tax adviser will work through your case.
Inheriting and gifting: GmbH shares in the family
Parents can pass a property GmbH on to the next generation in parts by gifting or bequeathing shares. A notary must notarise the assignment of shares (section 15 (3) GmbHG).
Inheritance and gift tax provide relief for business assets. A GmbH that only lets property usually does not receive it. Let properties count as administrative assets (section 13b (4) no. 1 ErbStG). If administrative assets make up at least 90 percent, nothing qualifies for relief (section 13b (2) sentence 2 ErbStG). In addition, the donor or deceased must in principle hold more than 25 percent. Under certain conditions, shares bound by a pooling agreement also count (section 13b (1) no. 3 ErbStG). An exception may apply to housing companies whose main purpose is letting flats and whose letting requires a commercial business operation (section 13b (4) no. 1 sentence 2 ErbStG).
The 10 percent reduction for rented flats only applies if someone inherits the flats themselves or receives them as a gift (section 13d ErbStG). It does not apply to GmbH shares.
Where several family members are involved, the contribution itself can trigger gift tax. If one family member contributes a property and the value of the other members’ shares rises as a result, this increase in value counts as a gift (section 7 (8) ErbStG).
If at least 90 percent of the shares pass to new shareholders within ten years or 90 percent are combined in one hand, real estate transfer tax may be due (section 1 (2b), (3) GrEStG). Acquisitions on death do not count under the first rule. Your tax adviser will check whether an exemption applies.
For how parents transfer a property directly to their children, see the article Transferring a house to your children.
How to set up an asset-managing GmbH
The shareholders conclude the articles of association before a notary (section 2 (1) GmbHG). The share capital is at least 25,000 euros. For a cash formation, the shareholders must pay in at least a quarter of each share and at least 12,500 euros in total before the application (section 5 (1), section 7 (2) GmbHG). The managing directors apply for registration with the commercial register, in Berlin at the Charlottenburg Local Court (section 78 GmbHG). The notary drafts the application, certifies the signatures and submits it. For the process, see the pages Set up a GmbH and Paying in share capital.
What matters in the articles of association
The company purpose defines what the GmbH may do. For trade tax, however, what counts is what it actually does. Your tax adviser can tell you how to word the purpose for tax reasons.
In a family GmbH, the articles often regulate what happens to the shares. They can make assignment subject to the company’s consent (section 15 (5) GmbHG) and contain rules for inheritance. The model protocol only fits with a maximum of three shareholders and one managing director and does not allow any individual rules (section 2 (1a) GmbHG). More on this in the article Articles of association or model protocol.
Can the GmbH be set up online?
Yes. You can set up a GmbH by video, including with contributions in kind (section 2 (3) GmbHG). The contribution of land is excluded. Notaries cannot notarise contracts on land and the conveyance by video (section 311b (1), section 925 BGB, section 16a BeurkG). The appointment takes place at the office; the parties can send a representative. For the video procedure, the GmbH must have its registered office in the notary’s official district, or a managing director must live there (section 10a (3) BNotO). You can book an appointment online for setting up a GmbH by video.
How does a property get into the GmbH?
There are four routes. The GmbH can buy a property directly from third parties. You then do not need an additional transfer from your private assets. If a property you already own is to go into the GmbH, three routes are possible.
| Route | Agreement | Real estate transfer tax based on | Income tax for privately held property |
|---|---|---|---|
| The GmbH buys new | purchase agreement between the GmbH and third parties | purchase price | none for you |
| You sell to your own GmbH | purchase agreement | purchase price | possible within the ten-year period (section 23 EStG) |
| You contribute the property without new shares | contribution agreement | property value | possible, counts as a sale (section 23 (1) sentence 5 no. 2 EStG) |
| You contribute the property in exchange for shares | articles of association or capital increase with contribution agreement | property value | possible, counts as a sale in exchange for shares |
A notary must notarise all agreements on transferring land (section 311b (1) BGB). If you sell yourself and at the same time represent the GmbH as managing director, representation on both sides must be clarified (section 181 BGB).
Formation with the property as a contribution in kind
Instead of money, a shareholder can contribute the property, as a so-called contribution in kind. The articles name the property and the amount the GmbH credits for it. The shareholders prepare a formation report (section 5 (4) GmbHG). They prove to the registry court that the property is worth the amount credited (section 8 (1) no. 5 GmbHG). This usually requires a valuation report. If the shareholders significantly overvalue the property, the court refuses registration (section 9c (1) GmbHG).
The contribution in kind must be made before the application so that the management can freely dispose of it (section 7 (3) GmbHG). The notary clarifies in each case how far the transfer of the property must be complete before the application. Registration costs 360 euros instead of 225 euros at the registry court (GV 2101 HRegGebV). An existing GmbH achieves the same through a capital increase with a contribution in kind (section 56 GmbHG).
Caution: hidden contribution in kind
Often the GmbH is first set up with cash and then buys the shareholders’ property. If the shareholders already agreed on this at formation, there may be a hidden contribution in kind (section 19 (4) GmbHG). The obligation to pay the cash contribution then initially remains. The GmbH credits the value of the property at the earliest on its registration, and the shareholders must prove it. If it does not cover the contribution, the shareholders must pay the difference. Discuss such a plan with the notary before formation.
Real estate transfer tax on contribution
If a private individual transfers a property to their GmbH, real estate transfer tax is due, 6 percent in Berlin (section 11 GrEStG with the Berlin tax rate). The exemptions for spouses and children only apply if these persons acquire themselves (section 3 no. 4, 6 GrEStG). The exemptions for transfers to a joint-ownership partnership, such as a GbR, do not apply to the GmbH (sections 5, 6 GrEStG). More on a GbR holding property in the article eGbR and property.
On a sale to the GmbH, the purchase price counts. On a contribution or contribution in kind, the property value determined by the tax office under the Valuation Act counts (section 8 (2) GrEStG). For how real estate transfer tax in Berlin is otherwise made up, see the article Property purchase costs in Berlin.
Income tax: the ten-year period
If no more than ten years lie between your purchase and the transfer to the GmbH, there may be a taxable private sale (section 23 (1) sentence 1 no. 1 EStG). If you inherited the property or received it as a gift, the purchase by the previous owner counts (section 23 (1) sentence 3 EStG).
This also applies if you contribute the property without consideration (section 23 (1) sentence 5 no. 2 EStG). If you contribute it in exchange for new shares, the tax office treats this as a sale. You cannot contribute a single privately let flat tax-neutrally under section 20 UmwStG.
Flats that you have used exclusively as your own home since purchase, or in the year of transfer and the two calendar years before, are exempt. Clarify the consequences with your tax adviser before notarisation.
Clarify financing and land charge in advance
An existing loan is in your personal name, and the land charge secures it. The loan does not automatically pass to the GmbH with ownership. If the GmbH takes it over, the bank must consent (section 415 BGB). The loan agreement sets out what rights the bank has on a change of ownership. Speak to your bank before the transfer. It will also clarify whether an existing land charge can continue to be used or a new land charge is needed.
You can enquire about transferring your property to a GmbH using our enquiry form.
What does an asset-managing GmbH cost?
According to the worked example below, setting up a GmbH with two shareholders costs around 1,029 euros for notary and registry court, excluding further expenses. If a shareholder transfers a flat worth 400,000 euros to the GmbH, around 28,158 euros come on top, of which 24,000 euros is real estate transfer tax. The law sets the fees of the notary, commercial register and land registry (GNotKG, HRegGebV). The law prohibits discounts (section 125 GNotKG).
Each year there are costs for bookkeeping, annual accounts and tax returns. Your tax adviser will tell you how much. In addition, there is the fee for the Transparency Register.
Worked example: formation with two shareholders
The assumptions are 25,000 euros share capital, individual articles of association, a managing director appointed by resolution, and a cash formation.
| Item | Calculation | Amount |
|---|---|---|
| Transaction value formation | articles of association €30,000 (section 107 (1) GNotKG) plus resolution €30,000 (section 108 (1) GNotKG) | €60,000 |
| Notarisation (KV 21100) | 2.0 × €192 | €384.00 |
| Shareholder list (KV 22110, 22113) | 0.5 × €192 | €96.00 |
| Flat rate for postage and telecommunications (KV 32005) | maximum | €20.00 |
| Transaction value application | share capital, at least €30,000 (section 105 (1) GNotKG) | €30,000 |
| Draft of the application (KV 24102) | 0.5 × €125 | €62.50 |
| Certification of signatures | included in the draft | €0.00 |
| Data for the registry court in XML format (KV 22114) | 0.2 × €125 | €25.00 |
| Flat rate for postage and telecommunications (KV 32005) | 20% | €17.50 |
| VAT 19% | on €605.00 | €114.95 |
| Fee of the electronic deed archive | 2 × €4.50 | €9.00 |
| Notary total | €728.95 | |
| Registration by the registry court (GV 2100 HRegGebV) | €225.00 | |
| Provision for retrieval (GV 6000 HRegGebV) | one third | €75.00 |
| Registry court total | €300.00 | |
| Total | €1,028.95 |
The share capital is not a formation fee. It is available to the GmbH as equity.
The worked example only includes the fees and the postage flat rate. Depending on the case, further expenses come on top, for example for certified copies and register searches. The notary invoice may therefore be higher than in the example.
Worked example: selling a flat worth 400,000 euros to your own GmbH
The assumptions are a purchase price equal to the market value and completion as in a sale between unrelated parties, with a priority notice of conveyance and monitoring of the purchase price payment by the notary.
| Item | Amount |
|---|---|
| Notary: purchase agreement, completion, supervision, XML data, expenses (estimated €46), VAT, deed archive | €2,955.11 |
| Land registry: priority notice, its cancellation, registration of the GmbH | €1,202.50 |
| Real estate transfer tax: 6% of €400,000 | €24,000.00 |
| Total | €28,157.61 |
For the calculation for notary and land register, see the article Property purchase costs in Berlin. If you contribute the flat without a purchase price, the fees depend on which activities and safeguards the agreement provides for. The real estate transfer tax is then based on the property value determined by the tax office.
Practical tip: Have your tax adviser calculate the real estate transfer tax and income tax before you book the notary appointment for transferring your property. Once the contract is notarised, there is usually little you can change.
Prepare the formation of your GmbH
Would you like to set up a GmbH for your properties? Book an appointment; we ask for the details we need in the booking form.
Frequently asked questions: asset-managing GmbH (FAQ)
When is an asset-managing GmbH for real estate worthwhile?
There is no statutory threshold. It mainly depends on whether the rental income stays in the GmbH, how long you hold the properties, whether real estate transfer tax is due on the transfer and whether the GmbH meets the conditions for the extended reduction. Your tax adviser will work this through for your case.
How much tax does a property GmbH pay on rental income?
On its rental profit it pays 15 percent corporation tax plus solidarity surcharge until 2027, 15.825 percent in total. If the extended reduction does not apply, 14.35 percent trade tax comes on top in Berlin. From 2028 corporation tax falls gradually to 10 percent in 2032 (section 23 (1) KStG).
Does an asset-managing GmbH have to pay trade tax?
In principle yes, every GmbH is a commercial business (section 2 (2) GewStG). On application it can reduce the part of its trade income that relates to managing its own real estate (section 9 no. 1 sentence 2 GewStG). Even small other activities can cost the reduction.
What does setting up an asset-managing GmbH cost?
With two shareholders, 25,000 euros share capital and individual articles of association, notary and registry court together cost around 1,029 euros, excluding further expenses. The calculation is in the section on costs. The share capital is not a formation fee; it is available to the GmbH as equity.
Do I have to pay real estate transfer tax if I contribute my property to the GmbH?
Yes, 6 percent in Berlin. On a sale to the GmbH it is calculated on the purchase price, on a contribution or contribution in kind on the property value (section 8 GrEStG). The exemptions for spouses, children and partnerships do not apply to the GmbH.
Can I sell my private property to my GmbH?
Yes, with a notarised purchase agreement (section 311b (1) BGB). Real estate transfer tax is due. If you bought the property no more than ten years ago, there may be a taxable private sale. Exceptions apply to flats you have lived in yourself (section 23 (1) EStG).
Can I contribute the property directly as share capital?
Yes, as a contribution in kind (section 5 (4) GmbHG). You need a formation report and proof of the property’s value. The registry court checks whether it is overvalued (section 9c GmbHG). You cannot complete a formation with a property by video.
Does an asset-managing GmbH have to pay inheritance tax?
The tax does not affect the GmbH but the heirs or recipients when shares pass. Whether tax is actually due depends on the value of the shares and personal allowances. Relief for business assets usually does not apply to a GmbH that only lets property (section 13b (2) ErbStG). The 10 percent reduction for rented flats only exists for directly held flats (section 13d ErbStG).
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Property GmbH with a notary in Berlin
For a property GmbH, the notary notarises the articles of association and the transfer of the property. The notary drafts the application to the commercial register and submits it. You can find further services on the pages Notary for corporate law and Notary for real estate law in Berlin.
