Who is listed in the land register? Division of ownership shares?

Hello,

we want to buy a plot of land soon and build later. Designing the house and organizing the construction company will be done some time after the land purchase. First, briefly for understanding: In this case (in Bavaria), we definitely only pay property tax on the land without any buildings, or will there be additional property tax on the house after completion?

now to the actual question:

Since land is extremely expensive here, we can’t avoid getting support from private loans. Our parents are helping with this. After the construction is finished, the cost distribution should look roughly like this:

7% me
21% my wife
5% my parents
41% my mother-in-law
26% my bank

My mother-in-law wants to be secured in the land register due to the large sum, just like my bank (at least that’s what I assume).

But if we first buy the land, which makes up about 60% of the total costs, we are buying it from our equity or what my mother-in-law (or my parents) contribute. The bank effectively pays only when the house is actually built.

1. How do I divide the ownership shares in the land register (or does the notary do this)?
2. Can this be adjusted later with little cost (i.e., when the house is built or even when the loans are paid off)?
3. Do I have to have the ownership shares recalculated after buying the house (since the bank will then be involved and will want its share)?

Thank you very much for your help.
Greetings from Munich,

downundaman

Hello,

... or will there be property tax on the house again after completion?

No.

1. How do I divide the ownership shares in the land register (or does the notary)?
2. can this be adjusted later without major costs (i.e., once the house is built or when the loans are eventually paid off)?
3. do I have to have the ownership shares recalculated after purchasing the house (since the bank is involved and also wants its share)

No one here can answer that for you because we do not know your personal situation => which is why "only" 7% etc. I also think that your division will not work like that because the shares of the mother-in-law, in my opinion, must be included as equity in the financing. I am thinking less about a security in the land register and more of a civil law and binding agreement between you and your mother in favor – in the worst case – of the daughter.

See a financing broker/tax advisor as well as a notary you trust and clarify these important questions in a personal conversation. I am fairly certain that it will not be so easy to reconcile the competing claims of 4 parties.

Best regards from the Rhineland

Hello,

I am always cautious with such arrangements!

Basically, it will come down to the fact that the house bank wants to be in first rank. So if you acquire the property in advance from the equity of you and your family, you can distribute the ranking calmly. However, afterwards everyone will move one rank backward.

Also, there will be no % distribution but rather an absolute amount entered under each name. In other words, house bank no.1, mother-in-law no.2, parents no.3.

How it looks purely from a tax perspective (since it is interest-free) I don’t know. Honestly, I would never put my mother-in-law in the land register.

I would also prefer a separate contract here. The land register option only causes trouble. A notary can provide targeted information here.

Isn't a normal loan agreement between private individuals enough for the mother-in-law? My father also had a larger sum in our first house back then. It was a gift ([Vorerbe]). But we did it as an interest-free loan... my father wanted security in case of a separation with us, which was perfectly fine.

Hello,

please specify: property tax or real estate transfer tax? Both exist!

Who should be registered where in the land register?

As owner? Mortgage creditor? Pre-emption rights? Somehow confusing and not precise enough.

Maybe absolute amounts instead of % could help to clarify who wants/should/must do what and how.