Buying a house as a family or couple: when a GbR can make sense
When couples, siblings or parents and children buy a property together, the question is not only who owns which share. It is also important: Who pays how much? What happens in the event of separation, death or subsequent transfer to the next generation? A civil law partnership, or GbR for short, can provide a flexible structure in such cases - but should be planned carefully. Notaries are competent partners in this regard.
Extensive regulation options for couples and spouses
„In the case of a joint real estate investment by unmarried partners, acquisition in a GbR can be a good option. This is because if one partner contributes significantly more equity, loan installments or investments, subsequent compensation claims are often uncertain and prone to disputes without clear regulations,“ explains Stefanie Rhode, Managing Director of the Brandenburg Chamber of Notaries. An acquisition in a GbR enables a tailor-made solution here: compensation or transfer claims in the event of a separation, regulations in the event of the death of a partner, whether and under what conditions GbR shares may be transferred to third parties and many other details can be regulated in the partnership agreement. In contrast to other forms of company, such as a GmbH, the effort involved in setting up and managing a GbR is usually significantly lower. For example, no minimum capital is required to form a GbR.
The purchase in a GbR is also worth considering for married couples. Rhode explains: „In addition to the aforementioned advantages of the GbR, special arrangements can also be made in the partnership agreement in the event of divorce or separation, such as for the continued use of the property, the transfer of shares or compensation for investments made. The GbR also enables a particularly flexible distribution of assets during the marriage.“
Asset participation of the next generation
If assets are to be passed on to children or grandchildren in the long term, a GbR can also be an interesting legal form. This is because it allows a gradual approach to the assets through the gradual transfer of shares. In addition, a structure can be chosen in which the parents or grandparents retain a certain amount of influence and income with regard to the assets held by the GbR as long as this is desired. If underage children are involved, special care is required. Additional legal requirements, such as the representation of the child or family court approval, may then play a role.
Current tax law developments regarding the „family home“
„Tax considerations often play a role in the decision to form a GbR,“ explains Rhode. Company shares in a GbR can generally be transferred more flexibly than co-ownership shares in a property. In this way, existing gift tax allowances can be utilized continuously and precisely under certain circumstances. If one partner invests more than the other, this can be compensated for by a corresponding transfer of shares. This is particularly important if there are only low tax allowances. „For example, in the case of unmarried couples whose gift tax allowance is only 20,000 euros, a higher investment contribution by one partner in the property can quickly trigger gift tax without corresponding compensation,“ warns Rhode. The legal and tax consequences of a share transfer should always be carefully checked in advance, especially in the case of real estate GbRs.
A recent court ruling has significantly reduced the weight of a previously frequently discussed tax objection to the spouses„ GbR. The Federal Fiscal Court has clarified that the so-called “family home privilege" under tax law, which exempts the transfer of an owner-occupied family home between spouses free of charge during their lifetime from gift tax under certain conditions, also applies in principle if the property is held in a GbR. The GbR structure therefore does not exclude the tax exemption for the family home from the outset. Whether the requirements are met in a specific case must of course always be assessed on a case-by-case basis and should be checked in advance by a tax advisor if necessary.
Why advice is important before buying real estate
Anyone wishing to purchase a property jointly should clarify at an early stage which legal structure is best suited to their case. If a purchase in a GbR is being considered, notaries will advise in particular on the structure of the articles of association and the necessary steps in the register and land register. The partnership agreement itself does not have to be notarized in every case. However, a notarized participation is required because a GbR that is to become the owner of a property must be entered in the company register (so-called „eGbR“). This requires the registration to be notarized. It is also often the case that the legal provisions on the GbR are not suitable in individual cases and different regulations are desired, e.g. in the event of death. Notaries provide support in finding the right legal structure and implementing it in a legally secure manner.
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