Many property investors ask whether they should buy through a company. The honest answer is that a company changes how rent, sales and withdrawals are taxed, and the result is not automatically better. In some cases, holding personally is the cheaper route.
This guide compares Germany and Ireland, covers what a company changes beyond tax, and sets out the questions that decide it. For the structure question behind it, see our guide to SPV vs HoldCo.
What changes when a company owns the property
Four things change:
•Rent is taxed at the company’s rate, not your personal rate.
•A sale is taxed inside the company, under company rules.
•Money in the company is not yet yours. Paying it out is a second taxable event.
•The risk is separated. Liability, co-investors and succession work differently.
The first point often looks attractive. The second and third are where the picture can flip.
Germany
Rental income
Personal income tax, up to roughly 47.5% at the top rate including solidarity surcharge
15.825% corporation tax and solidarity surcharge. Trade tax is usually avoided if the extended reduction applies
Selling
Tax-free after a 10-year holding period (§ 23 EStG). Within 10 years, taxed at your personal rate
No holding-period relief. The gain is always taxable at company level
Getting money out
Already yours
Dividends are generally taxed again at 26.375%
The extended trade tax reduction (§ 9 Nr. 1 Satz 2 GewStG) only applies if the company exclusively manages its own property. Selling the last property mid-year can put it at risk.
Illustrative example: a GmbH earns €30,000 of rental profit and trade tax is avoided. Tax at company level is about €4,750. If you pay the remaining €25,250 out as a dividend, about €6,660 more is due, around €11,410 in total (roughly 38%). The same profit taxed personally at the top rate would cost about €14,240. The company route wins on retained profit and narrows once you distribute. It also gives up the tax-free sale after 10 years.
Three more German points:
•Share deals are not automatically free of real estate transfer tax. It applies when at least 90% of the shares in a property-owning company change hands within ten years. Rates run from 3.5% to 6.5% depending on the state.
•A middle route exists. A GmbH & Co. KG structured as asset-managing can keep the 10-year rule, but income is taxed at your personal rate.
•Corporation tax is falling. A law passed in July 2025 reduces it by one point a year from 2028, reaching 10% in 2032. Trade tax is unchanged.
Ireland
Rental income
Income tax at 20% and 40%, plus USC and, in some cases, PRSI
25% corporation tax (the passive income rate, not 12.5%)
Undistributed profit
Not applicable
Close company surcharge of 20% on after-tax rental income not distributed within 18 months
Selling
CGT at 33% after the €1,270 annual exemption
Gain taxed in the company at 33%
Getting money out
Already yours
Dividends carry 25% withholding and are taxed as your income, with credit for the tax withheld
Illustrative example: a company earns €30,000 of rental profit. Corporation tax is €7,500. If the remaining €22,500 is not distributed within 18 months, the 20% surcharge adds €4,500, which brings the total to €12,000, an effective 40%. Paying the profit out avoids the surcharge but triggers tax at your personal level.
Most Irish property companies are close companies, meaning controlled by five or fewer people. So the 25% headline rate does not tell the whole story.
Beyond tax: why people still use a company
•Separate liability per property. A problem with one asset stays in its own company.
•Co-investors. Partners hold shares rather than co-owning a title.
•Succession. Shares can be passed on instead of the property itself, though transfer taxes can still apply.
•Financing. A company can borrow against the property it holds. Lenders often ask for personal guarantees, which reduces the protection the company gives.
These benefits can justify a company even when the tax result is neutral.
Which one fits? The questions that decide it
•How long will you hold? In Germany, a long hold favours personal ownership because of the 10-year rule.
•Will you reinvest the income or live on it? Retained profit favours a company. Paying everything out adds a second layer of tax.
•How many properties, and with whom? Several properties or partners point towards separate companies.
•What will lenders require?
•Where do you live, and where is the property?
Three illustrative scenarios
A German investor with one flat, held for 15 years. A sale after 10 years is tax-free personally and always taxable in a GmbH. Personal ownership is likely to fit better.
A German investor building a portfolio and reinvesting rent. Profits stay in the company at the lower rate, and separate companies keep each property’s risk apart. A GmbH can fit, as long as the sale and distribution costs are understood.
An Irish landlord who needs the rental income to live on. The income is taxed in the company and again when it reaches you. A company often adds cost rather than saving it.
Common mistakes
•Choosing a company for the lower headline rate alone. Sales and distributions can reverse the saving.
•Moving an existing property into a company without checking the cost. In Germany, this can trigger real estate transfer tax, and the gain can be taxable within the 10-year period. In Ireland, a transfer to a company you control is treated as a disposal at market value for CGT, and stamp duty can apply.
•Risking the German trade tax relief. Other activities or a poorly timed sale can cost you the extended reduction.
•Letting profit sit in an Irish close company. The surcharge applies if it is not distributed within 18 months.
•Assuming a company gives full liability protection. Personal guarantees to lenders reduce it.
Where the details matter
Whether a property company works depends on the jurisdiction, the holding period, your lenders, your co-investors and your exit plan. The same structure can help one investor and cost another. This is where the details matter. We handle the setup so you don’t have to.
Frequently asked questions
Is a property company always cheaper in Germany? No. Retained rent is taxed at a lower rate, but there is no tax-free sale after 10 years and dividends are taxed again when paid out.
Can I keep the 10-year rule through a company? Not in a GmbH. A GmbH & Co. KG structured as asset-managing can, but income is then taxed at your personal rate.
What is the close company surcharge in Ireland? A 20% charge on undistributed after-tax rental income of a close company, reduced if the income is distributed within 18 months of the end of the accounting period.
Does moving an existing property into a company trigger tax? It can. In Germany, real estate transfer tax can apply, and the gain can be taxable within the 10-year period. In Ireland, the transfer is treated as a disposal at market value for CGT where you and the company are connected, and stamp duty can apply.
Does Richmond Blackwood advise on which properties to buy? No. We incorporate and administer the structure and handle tax, payments and governance. We do not provide investment advice or regulated financial services.
The bottom line
A company can lower the tax on rent you keep inside it, and it separates risk property by property. It can also remove tax-free sales in Germany, add a surcharge in Ireland, and tax the same profit again when it reaches you. Whether it fits depends on how long you hold, whether you reinvest, who invests with you and what your lenders require.
If you are weighing this for one property or a portfolio, Richmond Blackwood incorporates real estate SPVs and handles tax, payments and governance. We analyse your setup and propose a structure at no cost to you, and you decide whether it makes sense. Talk to an expert.
Disclaimer
This article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax outcomes depend on your facts, residency position, entity types, and the jurisdictions involved. Always take advice from qualified professionals before restructuring, signing transaction documents, or completing a disposal.
