The question of property: real estate funds on credit: Incorrect retirement

Closed-end funds have so far survived every crisis. Banks have understood it skillfully to sell the fund as a supposedly inflation-resistant properties pension. However, the plant has many hooks.

Closed real estate funds have so far survived every crisis. You have the Bauherrenmodell survived as well as the proliferation in the East, and they will not come this year under the wheels. Shares in office buildings, commercial buildings, hotels, and supermarkets are enjoying despite many failures extremely popular and have entered into this market since the banks, the investments in addition to equities, insurance, and securities have become the fourth pillar in the business with wealthy private clients.

Banks have understood it skillfully to sell the fund as a supposedly inflation-resistant properties pension, and the reference to the ailing pension funds did not miss its effect. The business of banking is booming. But whether investors achieve similar profits, is in the stars.

The question of property: basic pension reduced for top earners the tax burden

The concept promises seemingly great benefits. Many small investors are joining together, divide commercial real estate and so are supposed to enjoy high returns that can not be achieved in residential construction. However, the funds are not as easy to maintain as many sellers are claiming. You need to be explained and complex. Opportunities and risks are hidden and can only be recognized with difficulty. This applies primarily to so-called savings funds to retirement. Here the units are not in cash but paid for with the help of loans. The pitfalls are apparent in the following example.

The proportion of a commercial building will cost 100,000 euros. In addition, the premium is 5 percent. For this, the investor will receive 20 years income of 6,000 euros a year. After that, the object is to be sold again. If all goes well, the investor will get back the used 100,000 euros in 20 years. but just as it is also possible that the final payment is higher or lower. Provided that the nominal capital flows back to 100 percent participation with a mortgage is comparable. Today, the investor puts 105,000 euros on the table, gets 19 distributions of each 6,000 Euros and gets the 20th dividend capital back so that flow backs a total of 106,000 euros at the end. The annual return of the payment stream is 5.58 percent before taxes. This is compared to fixed rate bonds offered at the moment, an excellent result. Since it is no wonder that real estate funds enjoy extraordinary popularity. After taxes, the bill looks compared to bonds even better. The interest rates on fixed-income securities are currently fully taxable. The income of real estate funds, however, are taxable in many cases only 75 percent, meaning that investors enjoy other benefits as a result of depreciation.

In connection with the loan, participations are traditional savings plans. There are many forms. They depend on the amount and term of the loans. If the participation funded as 100 percent, the investor receives 105,000 euros. Mortgages with interest rates fixed for ten years currently costs about 5 percent per year. The repayment is based on the objectives of the investor. Young savers are based on a long-running time, older specify when repayment on the gas because they want usually come to enjoy high dividends. Against this background, a repayment period of ten years has, for example, for a saver who is 50 or 55 years old, in. The investor puts in the first half of money, and in the second half, he gets the income and the capital back in full.

The tax tip: If the employer lends money

The advantages resulting from interest-free or low-interest company loans are subject to taxation by the employee as a cash benefit. For the determination, there are two evaluation methods.

The advantages resulting from interest-free or subsidized Company Loans are taxed by the employee as a cash benefit. For the determination of cash benefits – which arises when the employer his employee leaves a soft loan – there are two different evaluation methods:
One applies when the employer operates not originally banking, so for example is not even a bank. And one engages in the case in which the employer provides loans of the same type and the same conditions also to its customers and only the interest rate is different when the workers can borrow with that employer.

Loans: Cheap money from the boss

The intrinsic value is, however, only be taxed if it exceeds 44 euros per calendar month, so if the loan amount is correspondingly large.

It is important to determine the financial benefit that the employer the foundations for the determined interest rate advantage – has kept as evidence for payroll account – so the loan agreement and the underlying reference interest rate. For this, he is also required by law.

The time at which the resulting from the subsidized loans monetary advantage is a tax to be considered is the one on which the interest is due. Was the loan even granted at no cost, the monetary advantage arises when the normal interest payable would normally be due – usually this is the case, although the repayment installment is due – this, the Federal Ministry of Finance (BMF) in a letter dated 1 October 2008 clear (Az IV. C5-S 2334/07/0009).
Of particular importance is the BMF letter for the reintroduction of so-called non-took up limit of 2,600 euros. This was abolished in January of this year. Retrospectively it applies now but again the assessment period 2008. Thereafter interest benefits are only taxable as benefits in kind and included in the exemption limit of 44 euros per month if the sum of their outstanding loans exceeds 2,600 euros at the end of the wage payment period. The tax authorities objected to this, although the blanket application of the new rules, such as on the assessment in 2006, that the intrinsic value is not determined in this way in all not become final tax assessments of previous years.

This leaves interest benefits from loans of up to 2,600 euros in determining the imputed income before general outside. Exceed the loans granted the exemption limit of 2,600 euros is to check whether the intrinsic value exceeds 44 euros a month. Only then the employer must withhold income tax on it.