German Federal Fiscal Court on Specific Issues Relating to Real Estate Transfer Tax Exemption Under Section 6a GrEStG
Legal Insights Germany
December 05, 2025In two rulings dated May 21, 2025 (II R 31/22, II R 56/22), the Federal Fiscal Court (BFH) ruled on important individual questions regarding the scope and requirements for real estate transfer tax exemption in the case of intra-group restructurings pursuant to Section 6a Real Estate Transfer Tax Act (GrEStG).
Background
The exemptions under Section 6a GrEStG aim to facilitate internal group restructurings, but are subject to strict conditions. In particular, the five-year pre- and post-retention period for a minimum 95% shareholding must be fulfilled.
In the aforementioned rulings, the Federal Fiscal Court concludes that, in the case of a spin-off to an existing company—in contrast to a new formation—the five-year pre-retention period must be observed (II R 31/22). It also clarifies that only partnerships or corporations, but not a group of private individuals, can be controlling companies (II R 56/22).
Spin-off for Absorption Only in Compliance with the Retention Period (II R 31/22)
In II R 31/22, a municipality had transferred the operation of an assembly hall and the associated land to an existing, newly founded company by means of a "spin-off for absorption."
The Federal Fiscal Court confirmed the lower court's decision that the real estate transfer tax exemption under Section 6a of the GrEStG was not possible due to failure to comply with the five-year reservation period.
It was irrelevant that, in contrast to the present spin-off for absorption into an existing company, the five-year retention period was not relevant in the case of a spin-off for the purpose of establishing a new company (see BFH ruling of September 25, 2024 - II R 2/22; BFH decision of May 3, 2023 - II B 27/22).
Rather, the decisive factor is that the GrEStG is linked to civil law issues. This neither justifies reinterpreting the spin-off for the purpose of transferring assets to a newly established company as a spin-off for the purpose of forming a new company, nor does this different treatment raise any constitutional concerns.
Group of Persons Is Not a Controlling Company Within the Meaning of § 6a GrEStG (II R 56/22)
In II R 56/22, all shares in a real estate–owning corporation (P-GmbH) were transferred from the existing shareholder (L-GmbH) to the new shareholder (plaintiff) by way of a spin-off for the purpose of establishing a new company. The shareholders of L-GmbH were four private individuals. In the course of the spin-off, they received shares in the acquiring GmbH (plaintiff) that were identical to their shares in P-GmbH.
In this case, the BFH also confirmed the lower court's opinion that, with regard to the transfer of shares in P-GmbH to the plaintiff, which was subject to real estate transfer tax pursuant to § 1 (3) No. 4 GrEStG, the requirements for a real estate transfer tax reduction pursuant to § 6a GrESt were not met.
This failed because the shareholders of L-GmbH were private individuals and therefore did not constitute a "controlling company" within the meaning of § 6a GrEStG. Although the scope of application of § 6a EStG is not limited to certain companies or legal forms, this requires at least the form of a legal entity; mere groups of persons would not suffice for this purpose.
Implications for Practice
The rulings are in line with the case law of the Federal Fiscal Court (BFH), according to which civil law differences can lead to different treatment for real estate transfer tax purposes and thus to considerable additional burdens, even in similar circumstances. This makes careful planning and structuring all the more important, especially in the area of intra-group restructuring.
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