All property owners who may call more than one property their property should deal with the question of the legally secure structuring of their portfolio. Even if the portfolio is clearly structured and contains only two or a few more properties, a number of questions arise that need to be examined from a legal (but also from a tax) perspective. If this is not done, there is not only a risk of legally undesirable constructions, but they can also be very expensive and thus result in the loss of the desired return, if not in losses.
So the first question is in which legal form the properties should be held. Should it be a partnership, i.e. a civil law partnership or a limited partnership? Or should it be a corporation - which is less common - in the form of a GmbH or an AG? This does not only raise purely tax-related questions, as is often assumed, but also tangible civil law structuring variants that make it possible to deal with this portfolio later, to restructure it and/or to transfer it to a third party or to the heirs.
In our BLOG article of 13 March 2023, we already explained how property succession can take place in the case of real estate: by usufruct, by right of abode in rem, or via an annuity. In all these cases, the transferor retains certain rights that secure his financial position for the future.
Our consulting practice shows that these considerations are either not made at all by many real estate owners or, in any case, much too late. This can be remedied: we recommend that every property owner - irrespective of how many properties he or she owns - seek advice on the issues of structuring, in legal and tax terms, management and subsequent transfer (also in the context of testamentary dispositions and wills, etc.). In doing so, it is sometimes strongly recommended not to consult the all-knowing helpers in tax and legal matters, but to consult with highly specialised experts. This has the great advantage that these experts are independent in addition to their professional competence and thus bring with them the necessary trust that one needs for such important and especially valuable decisions and constructions. Moreover, such constructions often avoid disputes with regard to inheritance law arrangements, which the transferor can change again at any time, depending on the life situation.
We as JASPER Rechtsanwälte are highly specialised in the field of real estate support, from the legal inventory to the right legal construction to tailor-made legal (and tax) solutions for transfers during lifetime or upon death.
Düsseldorf, 12 June 2023
Dieter Jasper