Acquisition in fractions or GbR?

If you purchase a property together with several people (especially with your partner or family members), the question of the correct acquisition relationship arises. In particular, an acquisition in fractional shares or an acquisition in a civil law partnership can be considered. Acquisition in fractional shares is the classic and usually more cost-effective form of acquisition, which spouses in particular often choose. On the other hand, acquisition under civil law allows for a more differentiated and individual structure of the community of acquirers.

Both forms of employment have advantages and disadvantages, which can be summarized as follows:

Fractional community


  • More cost-effective than acquisition in GbR, as there are no additional fees for drawing up a partnership agreement
  • Legally simpler than the acquisition in a GbR, as more legal questions arise with a GbR
  • The participation quotas in the house/apartment can be determined with regard to different financing contributions in corresponding amounts. For example, if one partner contributes € 150 per month to the loan repayment and the other € 450, shares of ¼ to ¾ can be determined.

However, this provision is only possible if the future financial contributions are already fixed and do not change later. For example, it can happen that one partner contributes more than before after a salary increase. In such a case, the provision once made no longer applies and gift tax may arise if the parties involved do not adjust the quotas (see below).

  • The partition auction can those involved between the co-owners exclude, so that no co-owner can apply for a judicial auction to resolve the matter against the will of the others. The co-owners must then come to an agreement if one wants to leave the fractional community.
  • The co-owners can also regulate the use of the shared property. For example, they can stipulate that one co-owner uses the apartment on the first floor and one co-owner uses the apartment on the second floor.
  • The fractional owners can agree reciprocal rights of first refusal and purchase rights.
  • For spouses who live in the property together, the so-called “family home privilege” applies in the case of gifts: No gift tax is then payable on transfers of shares or the entire property between spouses, regardless of the value of the property. The gift tax allowance of € 500,000 between spouses is therefore not required at all when transferring the family home.


  • The further arrangements between the co-owners described above (joint use, exclusion of partition auctions, pre-emption and purchase rights) trigger additional costs, as does the drafting of a GbR partnership agreement.
  • Further differentiated regulations on the relationship between the purchasers, as in the case of a civil law partnership, are not possible. This applies in particular to sensible provisions on termination, withdrawal for certain reasons, the shareholders' meeting and death. All regulations that are possible with a fractional partnership (see above) are even more possible with an acquisition in a civil law partnership.
  • In the case of unmarried partners gift tax can arise, if one partner makes more financial contributions than his/her shareholding and thus makes a gift to the other partner. This is because in this case, one partner partly finances the other's participation. The quotas in the fractional community are fixed and do not automatically adjust to the financial contributions. In the case of unmarried partners, the gift tax allowance is only € 20,000, which means that gift tax can quickly arise. In the case of married couples, on the other hand, a gift tax problem rarely arises due to the €500,000 gift tax allowance and the privileged status of the family home (see above).  
  • Some partners also feel that the rigid quotas are unfair, as they do not receive a correspondingly higher share of the property if their financing contributions are higher.
  • Between the co-owners is real estate transfer tax payable on the sale of shares. The transfer is only exempt from real estate transfer tax if an exemption applies, in particular in the case of married couples or between relatives in a direct line (i.e. primarily between parents and children and vice versa), but not in the case of unmarried partners.
  • Fractional owners can freely and independently sell or bequeath their shares to third parties, without having to ask the other co-owners for permission. This means that third parties can become members of the community of owners even against the will of the other members.

Company under civil law


  • Flexible participation quotas are possible depending on the financing contributions of the shareholders. This can prevent a gift tax liability - especially in the case of unmarried partners - if the partners make different financial contributions and would therefore constitute a gift from one partner to the other in the case of fixed participation ratios (see above).
  • In addition, the flexible participation quotas are fairer, because everyone always owns as much of the property as they have invested.
  • The legal relationship between the purchasers can be structured in a differentiated manner according to your needs and regulatory wishes, in particular with regard to a possible separation, termination, exclusion of shareholders, compensation, succession and subsequent lifetime participation of children and other successors.
  • No shareholder can sell his share without the consent of the others (unless the shareholders agree otherwise in the articles of association). In this way, the shareholders can ensure that new shareholders can only join with their consent the company.
  • Transfers of shares are also possible in pure written form - i.e. without the involvement of a notary.
  • In the case of transfers between shareholders , no real estate transfer tax is generally payable up to an acquisition of 90% of the shares in the property by a shareholder.
  • In the case of transfers between shareholders (without a shareholder leaving completely), no change in the land register is necessary.
  • When partners leave and join the company, the necessary entry in the land register is often less expensive than in the case of a fractional community.


  • A GbR is legally more complicated than a simple fractional partnership.
  • Additional costs are incurred for the preparation of the articles of association.
  • Whether the gift tax “family home privilege” (see above) is applicable to a GbR between spouses has not yet been clarified.
  • In the case of a GbR, certain state subsidies (e.g. the former Baukindergeld) may be excluded.

Overview of forms of protection for the partner's investment in the other partner's property

There are various options for securing investments made by one partner in the property of the other partner. The most frequently chosen alternatives can be summarized as follows:

  1. Acquisition in GbR or contribution to a GbR

As described above, it is possible to buy the property as a civil law partnership or to incorporate it into a civil law partnership at a later date. In the partnership agreement, you can make detailed provisions, in particular on termination, separation, inheritance, exclusion of shareholders, investments, the formation of reserves and decision-making as well as severance payments. Furthermore, you can also stipulate that each shareholder always has an interest in the company and thus (economically) in the property to the extent that he/she has contributed to the property. Of course, transferring the property to a GbR is usually the most complex and cost-intensive solution.

  1. Settlement of accrued gains in the event of divorce

In the case of married couples, in the event of divorce, investments may be equalized via the gain.

The first step in the equalization of accrued gains is for the court to determine the amount of the partners' accrued gains. Gain is the amount by which the assets of each party have increased from the beginning of the marriage until the lis pendens of the divorce petition. It is therefore the difference between the initial and final assets.

Example: The wife had assets of € 50,000 at the beginning of the marriage and assets of € 250,000 at the end of the marriage. Her gain amounts to € 200,000. The husband had assets of € 100,000 at the beginning of the marriage and assets of € 150,000 at the end of the marriage. His gain amounts to € 50,000.

In the second step, the court determines the difference (differential amount) between the spouses' two amounts of accrued gains.

Example: In the example, the wife has realized a gain of € 200,000 and the husband a gain of € 50,000. The difference (differential amount) is € 150,000.

The partner who has made a higher gain must pay half of the difference to the partner who has made a lower gain.

Example: In the example, the wife has made a higher gain than the husband. The difference is € 150,000, half of which is € 75,000. The wife must therefore pay € 75,000 to the husband as equalization of accrued gains.

In the case of equalization of accrued gains, investments made by the partner in the assets of the other partner are also included in the equalization calculation. This is because these investments reduce the final assets of the investor and increase the final assets of the property owner. Of course, it is not certain whether equalization will take place via the gain, as this always considers the entire assets and it is therefore still possible that the investor will be liable to pay later (because he/she has nevertheless achieved the higher gain, for example because he/she has earned more and saved more). In addition, only a maximum of half of the investment amount is offset via the additional gain. Finally, there is no equalization if the investment is no longer reflected in the final assets because it no longer increases the value of the property due to the passage of time or the owner has sold the property and spent the purchase proceeds.

  1. Transfer of a co-ownership share

To secure the partner's investment, you can also transfer a co-ownership share in the property to the investor. The amount and thus the value of the share should correspond to the planned investment sum. Of course, in the case of a “stretched investment” (e.g. through a monthly contribution to the repayment of a loan), it is not certain at the time of transferring the co-ownership share whether the investment sum will still be reached. This is because the investor may no longer be able to make the agreed monthly contribution in the event of unexpected unemployment, for example. In this case, you can agree on collateral in rem (such as mortgages) or an obligation to retransfer the share.

a) Possible disadvantages

The transfer of a co-ownership share incurs notary and land register costs depending on the value of the share. In the case of unmarried couples, real estate transfer tax is also incurred to the extent of the value of the intended investment. Furthermore, unmarried couples in particular may incur gift tax if and to the extent that the value of the transferred co-ownership share exceeds the value of the investments. This is because unmarried partners only have a gift tax allowance of € 20,000.

However, the biggest disadvantage of transferring a co-ownership share is that in many cases it proves to be superfluous in retrospect, because:

Experience shows that in the event of a separation/divorce, the person who originally owned the property often takes it over again. Notary and land registry costs are then incurred twice for the back and forth transfer of the property, without anything being gained for the parties involved.

A further disadvantage may arise from the fact that the acquirer of a co-ownership share may be entitled to a supplementary compulsory portion that would not arise without the transfer:

Example: Spouses A and B live in a property that belongs to A alone. B has few assets. The couple have two children together. In addition, B has a child from a previous relationship with whom there is no longer any contact. The couple want to appoint each other as heirs and the two joint children as final heirs. B's child from the previous relationship should receive as little as possible in the event of inheritance. In particular, the compulsory portion of B's child from the previous relationship should remain as low as possible.

If A keeps the property alone and dies first, we can use a so-called prior and subsequent succession to ensure that the compulsory portion of B's child from the previous relationship does not apply to the property at all. If, on the other hand, A transfers a share of the property to B during his or her lifetime, the compulsory portion of B's child from the previous relationship must also relate to the share of the property that B has received. The transfer to B therefore increases the compulsory portion of the child from the first relationship and, conversely, reduces the estate for the surviving spouse and the joint children! In such a case in particular, no transfer should be made!

 b) Possible advantages

Transferring the co-ownership share therefore seems particularly sensible if, in the event of separation/divorce, you would like to decide together on an equal footing who takes over the property or whether you would like to sell it to a third party.

Furthermore, a transfer (even over and above the value of the investments) may make sense if the assets are unevenly distributed between you. The survivor may then have to pay inheritance tax if he or she inherits a lot of assets from the first deceased. You may be able to avoid or at least reduce inheritance tax by transferring a co-ownership share. However, it should be noted that there is a general inheritance tax allowance of € 500,000 for married couples, but only € 20,000 for unmarried couples. Married couples can also claim the so-called “family home privilege”: If the surviving spouse lives in the house or apartment for at least another 10 years, it remains tax-free - in addition to the tax-free amount of € 500,000! You retain the family home privilege even if the survivor dies within the 10 years or has to move into a care home due to increased need for care.

c) Possibly better alternative for investment protection: loan agreement

This shows that in many cases it only makes sense to provide financial security for the investor(s). This can be achieved by concluding a loan agreement as described below (4.).

d) Possibly a better alternative for provision in the event of death: inheritance contract / will

If you are particularly concerned with providing security in the event of death and tax considerations are not an issue, a notarized inheritance contract or a notarized will is usually sufficient. In these, you can ensure that the survivor inherits the property alone or receives a right to live in it and can thus continue to live in the property. With a notarized contract of inheritance or a notarized will, your heirs can have the land register corrected in their name without having to spend time and money on a certificate of inheritance.

  1. Loan agreement without land charge security / without acknowledgment of debt

As part of a loan agreement, you agree that the partner's investment in the other's property is not a gift, but must be repaid in certain cases. The cases of repayment are in particular

  • Death of one of the parties involved
  • Insolvency proceedings of the owner
  • Submission of a statement of assets by the owner
  • Enforcement measures against the owner
  • Insolvency of the owner
  • Unauthorized dispositions by the owner of the property
  • Separation of the parties involved.

In these cases, the investor then receives the invested amount back. You can also agree an obligation to pay interest for the period until repayment.

You can conclude such a loan agreement yourself in a private deed without notarial involvement. Additional security in the form of a land charge and/or acknowledgement of debt is then provided in a separate notarial deed if you wish (see section 6 below).

  1. Loan agreement with land charge security and acknowledgement of debt

Alternatively, a notary can draft such a loan agreement for you. The advantage of this is that the loan agreement is formulated in a legally secure manner and gains increased probative value through notarization.

In addition to such a notarized loan agreement, the owner can create a land charge for the investor. The investor can then enforce the property if necessary if the owner does not repay the loan when it falls due. The land charge to be entered in the land register secures the investor a certain ranking in the satisfaction of all creditors in the event of a forced sale of the property. If the land charge is entered in the land register after the financing credit institutions, there is of course a risk that the investor will not receive the invested amount back in full or at all in the event of enforcement if and to the extent that the senior credit institutions claim the proceeds for themselves.

Furthermore, the owner can also make an acknowledgement of debt with regard to the loan amount and submit to immediate foreclosure on all assets. With the help of such a submission to foreclosure, the investor can also directly enforce against all of the owner's other assets if the owner no longer repays the loan.

  1. Isolated creation of a land charge and/or isolated acknowledgement of debt for an existing loan agreement

If you conclude the loan agreement privately between yourselves without the involvement of a notary (section 4. above), you can nevertheless also notarize a land charge and/or an acknowledgement of debt with submission to foreclosure on all assets (section 5. above). This procedure is less expensive than having the notary draft the loan agreement (section 5 above). Of course, in this case the notary will not check the loan agreement you have concluded yourself.

If you have any questions or would like to make an appointment (by telephone), please do not hesitate to contact us.