Germany: Real Estate Transfer Tax

27. April 2021 | Reading Time: 3 Min

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Real Estate Transfer Tax on Share Transfers and Share Unions

For some time now, the tax authorities and legislators in Germany have been planning to reform the taxation of share transfers and share unions in real estate companies. After almost 2 years, the reform is now in the final phase.

What is the aim of the RETT reform in Germany?

The aim of the real estate transfer tax (RETT) reform is to further restrict currently permissible ways to avoid RETT. Similar to Austria, the current legal situation in Germany allows a certain amount of leeway, so that, for example, the acquisition of only 94% of a real estate company is not subject to real estate transfer tax in many cases. Here is an overview of the most important changes in Germany:

Lowering the 95% threshold to 90%

The critical participation level at which RETT is triggered by asset participations or share transfers is to be lowered from the current 95% to 90%. In Austria, this threshold is 95%.

Creation of a new supplementary provision for corporations

RETT will be triggered in case of a direct or indirect transfer of at least 90% of the shares in a real estate holding corporation to new shareholders within a ten-year period. In the case of corporations, it is therefore no longer only the achievement of a qualified shareholding quota by a majority shareholder that is decisive. A similar regulation previously existed only for partnerships in Germany. In Austria a comparable regulation has been in place since 2016.

It should therefore no longer be possible to avoid the incurrence of RETT by acquiring 100% of real estate-owning companies by using an acquisition structure with two new investors: 2-acquirer model with currently 94.9% / 5.1%.

Stock exchange clause: Since this provision would lead to transactions subject to real estate transfer tax in the case of listed companies due to stock exchange trading, share transfers due to stock exchange transactions are to be exempted.

Extension of the time limits from 5 to 10 years

The current time limits in the provisions of the RETT are to be extended to 10 years. Up to now, RETT is levied if, for example, at least 95% of the shares in the assets of a real estate partnership are transferred to new partners within 5 years; the same applies in Austria.

In practice, arrangements whereby 94.9% of the partnership’s assets are transferred to a new partner in a first step and the remaining 5.1% are acquired only upon expiry of a 5-year period are to be made more difficult by extending the period to 10 years.

Effective date

The amendments to the Act are applicable for the first time to acquisition transactions realized after June 30, 2021. In connection with the effective date provisions, various – in some cases complex – transitional provisions must also be considered.


The legislative amendments outlined above originate from the recommended resolution on the “Act to Amend the Real Estate Transfer Tax Act” published by the Finance Committee of the German Bundestag on April 15, 2021. Following the resolution of the draft law in the Bundestag, the Bundesrat still has to approve the law.

It is apparent that the amendments to the law will lead to significant restrictions for new investors and a substantial additional burden for existing real estate portfolios. The amendments to the law and the transitional provisions are extremely complex and must be carefully examined in any case for direct as well as indirect real estate transactions.


Do you still have questions about the planned changes to the real estate transfer tax in Germany? Contact our tax experts!


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