Planned Changes to German Real Estate Transfer Tax Regarding Share Deals

Legal Insights Germany

March 03, 2026

As part of the Ninth Act Amending the Tax Consultancy Act (Neuntes Gesetz zur Änderung des Steuerberatungsgesetzes), the German legislature is planning significant changes to the Real Estate Transfer Tax Act (RETT Act). These are primarily aimed at standardizing the controversial real estate transfer tax (RETT) issues surrounding share deals that have been under discussion for several years (see inter alia our LawFlash of August 12, 2025). In particular, the problems of multiple taxation and multiple reporting obligations at signing and closing shall now be resolved.

New Legal Provision on the Subsidiarity of Closing in Section 1 (3b) RETT Act-Draft

As before, in share deals, the signing of the share purchase agreement triggers RETT if the thresholds of Sections 1 (3) or 1 (3a) RETT Act are exceeded.

Until now, it was unclear whether and under what conditions the transfer of shares in rem (closing) would trigger RETT again, which taxable event is superseding, and how double RETT could be avoided by timely notifications of the taxable events.

This will now be resolved by making the provisions on the transfer of shares in rem pursuant to Sections 1 (2a) and (2b) RETT Act (closing) only to be applied subsidiarily. The provisions shall no longer apply if a transfer of shares takes place in fulfillment of a taxable event pursuant to Sections 1 (3), (3a) RETT Act (signing).

As a result, the planned new rules will prevent multiple taxable events from being formally fulfilled by the same transaction at the legislative level in the future.

Priority Taxation Date: Signing

Under the planned subsidiarity rule, the relevant taxation date for RETT in a share deal will be the signing date. This means that, as in the case of a direct purchase of real estate (asset deal), a legal transaction that takes place earlier in the process is decisive for the accrual of RETT; the subsequent transfer of title in rem does not trigger any further RETT.

Further changes, Entry into Force, and Transitional Provisions

In addition to this provision on the relationship between signing and closing, the following changes are planned:

The property holding company will become an additional RETT debtor and reporting entity for taxable events pursuant to Sections 1 (3) and (3a) RETT Act.
The reporting deadline for all taxpayers will be extended to one month.
In the case of undeveloped land intended for development, the value in its developed state forms the basis for assessment.

The changes are to come into force on the day after their promulgation. For transactions that were signed before the promulgation of the new law but are closed after that date, the signing date shall also be the relevant taxation date, meaning that the new regulation will already apply.

Practical Implications

Reporting requirements for share deals will be significantly simplified, as in future only one notification will be required for the signing, which must be submitted by all parties involved (seller, buyer, property holding company), and a uniform deadline of one month will apply.

On the other hand, however, this also gives rise to new challenges in transactions: Due to the fact that the property holding company is an additional taxpayer for the signing, the question arises as to the economic allocation of the RETT between the three companies involved, and their risk exposure in the event of late notification and/or failure to close the transaction. In addition, it must be clarified whether a full deduction of costs at the level of the property holding company is possible for the RETT amount, or whether in some cases "only" (subsequent) acquisition costs are to be recognized in the balance sheet of the buyer and, if applicable, the seller.

It should still be noted that, even under the planned new legal provisions, the provisions of Section 1 (2a) and (2b) RETT Act may apply if and to the extent that there is no property identity between signing and closing, i.e., if the property holding company acquires new property after signing.

Since the amendment to the law may apply to share purchase agreements signed before the law comes into force but which are only executed after it comes into force, the planned changes should already be addressed in contract negotiations through respective contract provisions in order to regulate future payment and compliance requirements as well as possible liability issues.

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