Real Estate as inheritance - what's the best way to manage it as a group?

Real Estate
1

Hello,

I’m seeking advice on managing real estate with three people sharing all the assets.

My two siblings and I will inherit some apartments and a house. Instead of splitting the objects, we’ve decided to manage the assets as a group and share the income.

We’re also in the process of acquiring a new unit and combining it with the existing properties.

However, we’re unsure how to proceed with the real estate. Should we form a company to manage the assets and share the profits, which could lead to double taxation? Alternatively, what other form of agreement could we consider to manage the different assets collectively?

Our goal is to rent out the properties and share the annual income among all siblings.

We would greatly appreciate any help you can provide.

2

I would say yes, create a GmbH/AG where you and your siblings are owners. You get the profit through dividends. I think in Switzerland, you do not have a special form for companies dealing only with real estate.

Eine eigene Firma für Immobiliengeschäfte? | Fasoon

Tax wise it should be an advantage. further advantage is to keep the risk limited to the company finances.

1 Like
3

Go with a company without even thinking. LLC or AG preferably.

If you are in the process of acquiring a new property, use this occasion to start up the company and then you can move at your leisure the other properties in.

Double taxation is obviously there, but with a maximum of company rate ~15% in Switzerland it is still reasonable.

Also, depending on the state of the properties, be prepared that you might not get any dividends of a few years as you might want to do some improvements and to constitute some reserves for future maintenance or scheduled works.

And in fact the company can carry out any activity which is stated in the statutes, not just real estate. What you do and how you do it at creation is extremely important, take the time to figure this out.

1 Like
4

Why not sell it, split evenly and invest the winnings into the market. Rental yields ain’t that good and you pay tax on it, don’t pay tax on capital gains.

1 Like
5

When owning more than 10% of a company you get a partial taxation on dividends. This is exactly to avoid some double taxation. It will cost you more or less the same as if you would own it directly but with extra flexibility (if you keep the money in the entity, you delay some taxes).

I would really not sell it when inheriting. Real-estate is still a great diversifier. Place it into an AG to manage the family assets.

1 Like
6

I would! Not because of managing the assets or sharing the profit but mainly because of liability. Doing “nothing” will automatically result in a form where everyone is liable personally, unrestricted and in a joint form (“persönlich, unbeschränkt & solidarisch” - may it be as an “Erbegemeinschaft” or “einfache Gesellschaft”).

I’d consult a lawyer for the best setup regarding liability, taxes, …

And I would answer the question to myself: If you and your siblings inherit the cash-equivalent, would you buy the objects?