Private property

Sole Ownership - In real estate law, sole ownership (also known as individual ownership) refers to the exclusive ownership of a parcel of land or a building by a natural person or a legal entity - as opposed to co-ownership, condominium ownership, or joint tenancy. The sole owner has unrestricted control over the property and may sell, encumber, rent out, or renovate it without the consent of others.

Distinction from Other Forms of Ownership

In the case of condominium ownership (WEG), the owner holds only the exclusive ownership of their unit as well as a co-ownership share in the common property-they are bound by the decisions of the owners’ meeting. Renovation and remodeling measures involving the common property require majority decisions; in larger condominium associations, this often takes years.

In the case of co-ownership by shares (§§ 1008 ff. BGB), several people share ownership of the entire property-disposing of the whole requires the consent of all. This is typical for couples who buy together without specifying the form of ownership, or for inheritance cases with multiple heirs.

In the case of joint tenancy (e.g., community of heirs, GbR), the property belongs to the community, not to the individual members. No co-owner can sell their share alone. Individual ownership, by contrast, offers the greatest freedom of action and completely avoids the need for coordination.

Advantages and Disadvantages

The greatest advantage of individual ownership is complete freedom of decision-making: no need to coordinate with co-owners, no WEG resolutions, no shareholders’ meetings. This significantly simplifies selling, renting, and renovating. As an individual owner, you can renovate, remodel, or make energy-efficient upgrades to your home whenever you see fit-without having to wait for a majority vote.

The downside is that the individual owner bears the entire financial risk alone-maintenance costs, vacancy, and depreciation fall entirely on them. They must also handle financing on their own, without being able to rely on other owners for support. In the case of a multi-family home under individual ownership (i.e., without division into condominium units), the owner bears sole responsibility for the roof, facade, stairwell, and all common-use facilities.

Sole Ownership of Multi-Family Buildings

A multi-family building that is wholly owned by a single individual offers special advantages to investors: They can tailor the entire building to their investment goals without having to take other owners into account. Renovation projects can be implemented quickly, lease agreements can be structured strategically, and a later sale of individual units (after conversion to condominium ownership) allows for significant increases in value compared to the purchase price of the entire building.

However, the purchase of an entire multi-family home involves significantly higher capital expenditure. For investors in Nuremberg and the metropolitan region, this scenario is particularly suitable in neighborhoods with high demand and renovation potential-such as Gostenhof, Steinbühl, or the Südstadt. In practice, we regularly see properties where purchasing the entire building is significantly cheaper per square meter than buying individual apartments.

Tax Aspects of Individual Ownership

Individual ownership does not offer any fundamental tax advantages over other forms of ownership. Depreciation (AfA), income-related expenses, and the ten-year speculation period (§ 23 EStG) apply equally. However, a practical advantage is that maintenance and renovation measures can be carried out immediately without a WEG vote and claimed for tax purposes. In the case of comprehensive renovations under §§ 7i, 7h EStG (historic preservation or redevelopment areas), the individual owner benefits from the full increased depreciation without having to wait for decisions by other owners.

Practical Tip for Owners in Nuremberg

We recommend that buyers in the Nuremberg metropolitan region who are deciding between condominium ownership and individual ownership (e.g., single-family home, semi-detached home, or an entire multi-family home) carefully weigh the long-term differences. With individual ownership, the often tedious WEG processes are eliminated-you make renovation decisions on your own, and a sale does not require third-party approval.

Especially with older multi-family homes that are for sale as a whole, purchasing them as individual properties can be more attractive than buying individual units. We analyze for investors whether a property represents a better investment as a complete package or in parts-and highlight the potential for value appreciation that can be realized through a later division into condominiums.

Frequently Asked Questions

Can individual ownership be converted into condominium ownership?

Yes. Through a declaration of division pursuant to Section 8 of the German Condominium Act (WEG), the individual owner of a multi-family home can divide the building into individual condominium units. This is often required prior to the individual sale of apartments and necessitates notarization and registration in the land registry. Buyers who acquire a multi-family home with the aim of selling individual apartments should factor the costs and time required for the division (approx. 3,000-8,000 euros depending on the effort involved, plus land registry fees) into their calculations.

Is individual ownership more advantageous from a tax perspective?

For tax purposes, individual ownership and condominium ownership are generally treated the same-depreciation, income-related expenses, and capital gains holding periods apply identically. The advantage of individual ownership lies more in practical management: renovation costs and maintenance can be claimed for tax purposes without requiring approval from the condominium association, which offers greater flexibility in timing optimization.

What happens to individual ownership in the event of inheritance?

In the event of inheritance, individual ownership passes either to the sole heir (who retains it as individual ownership) or to a community of heirs (which holds it as joint ownership). In the second case, the heirs must agree on its future use-sale, transfer to one heir, or partition auction. A will with clear allocation avoids disputes. We recommend that owners consult a notary in a timely manner for succession planning.

As a private individual, can I purchase an entire multi-family home as individual ownership?

Yes, this is possible and quite common among investors in Nuremberg. The prerequisite is sufficient creditworthiness and equity to finance the entire property. Banks typically finance multi-family homes as individual properties under terms comparable to those for individual condominiums, provided the occupancy rate and property quality are satisfactory.

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