Is it feasible to buy a second house with a mortgage on the first house?

That is completely overpriced in the range we are talking about here.

If I understood correctly, the OP did not only ask about the lowest costs but also about feasibility and risk assessment. It should also be clear that companies pay taxes and that not everything just disappears into thin air. Running a corporation such as a GmbH is really not rocket science. That there are basic costs for operating a company is also no secret. And of course, starting a business is not a universal remedy for real estate transactions. Whether a feasible solution can be built that best takes into account the needs of the parties involved is unclear.

If I understood correctly, the OP was not only asking about the lowest costs but also about feasibility and risk assessment. It should also be clear that companies pay taxes and not everything just disappears into thin air. Running a corporation like a GmbH really isn’t rocket science. That there are basic costs for operating a company is also no secret. And of course, founding a company is not a general magic recipe for real estate business. Whether a feasible solution can be built that best meets the needs of the parties involved is unclear.

In this case, money is the strongly limiting factor. But if money is already tight, you don’t have to pay ancillary purchase costs a second time for the existing house. I’m not even concerned about taxes. They can sometimes even be cheaper than the personal tax rate if you earn a high income. (Which is not the case for the OP.) You simply have ongoing higher costs per year in a GmbH than when holding real estate in private assets. Besides the founding costs for the GmbH, you will quickly get mail from the Chamber of Commerce and the TV license fee office. Preparing the balance sheet/e-balance/corporate tax return is also more complex than a simple Anlage V or a profit and loss statement. Not everyone can or wants to do that. For this setup you also need more consulting, as the legal situation also changes, so again consulting costs. To my knowledge, banks also charge interest surcharges or you fail with many banks because it’s not a standard transaction. I have prepared many financial statements and tax returns for such GmbHs. In many cases, the effort was not worth it. I’m not saying it doesn’t make sense. But this is a construct that rich people use to tax their real estate assets cheaply and defer taxation into old age. Then there is the possibility to reduce inheritance tax and real estate transfer tax when inheriting. However, the tax authorities naturally try to get their share and are increasingly restricting this. This is then attempted to be compensated again by combinations with partnerships GmbH&Co.KG. As a small side effect, you also lose the possibility of selling, since trade tax is due on the profit in addition to corporate tax. In private assets, it is tax-free after 10 years. Just believe me that there are so many disadvantages in the proposal that it can make no sense at all in this case.

As a small side effect, you also take away the possibility of selling,

You even have advantages when selling. You do a share deal and save taxes. Of course, the buyer does too. For a single-family house. LOL and ROFL

But only if you only have the new property in the company and retain 10% of the shares. That will really please the buyer that he not only gets the right of residence in the single-family house but also only has to/may acquire 90%.

There is not only the GmbH as a form of company. There is also a GbR or Gu, which from my understanding could also work?

If two spouses acquire jointly, the ownership community is nothing other than a GbR. So no difference. And Gu (I assume you mean UG) is not much different to treat for tax purposes than the GmbH, just with less liability (which in the end is circumvented in both cases by the private guarantee of the shareholders). Ultimately, however, the same as the GmbH. But this all goes too far, as it doesn't help the OP at all.