Major Changes to Real Estate Transfer Tax for Share Deals Have Failed—For Now
Legal Insights Germany
May 12, 2026As part of the passage of the Ninth Tax Advisory Amendment Act, the German Federal Parliament recently adopted significant amendments to the Real Estate Transfer Tax Act. These amendments are primarily aimed at standardizing the issues of demarcation in share deals that have been the subject of controversy between tax authorities and the courts for several years (see our LawFlash of August 12, 2025). In particular, the issues of multiple taxation and multiple reporting obligations at signing and closing were, fortunately, to be addressed by the legislature.
On May 8, 2026, the German Federal Council refused to approve the bill due to the so-called relief bonus for employees in the amount of 1,000 euros, which was also included in the proposal.
At this point, it is unclear whether the federal government or the federal parliament will call upon the Mediation Committee (Vermittlungsausschuss) and whether the relief bonus will be removed from the bill. It is also conceivable that the legislative changes (without the relief bonus) will be reintroduced in a separate draft bill. We are monitoring the upcoming developments and discuss below what specifically—prior to the federal council’s veto—was planned.
The legislative resolution of the federal parliament includes in particular:
Amendments to the Real Estate Transfer Tax Act
- The provisions governing the transfer of shares in rem pursuant to Sections 1(2a) and (2b) of the Real Estate Transfer Tax Act (Closing) now apply subsidiarily and no longer apply if the transfer of shares takes place in fulfillment of a legal transaction subject to real estate transfer tax within the meaning of Sections 1(3) and (3a) of the Real Estate Transfer Tax Act (Signing). Due to the reversal of the order of priority of the supplementary grounds for real estate transfer tax liability in a share deal, the signing will henceforth be the decisive point in time for taxation.
- The property-owning company becomes an additional taxpayer and is required to file a return for transactions pursuant to Sections 1(3) and 1(3a) of the German Real Estate Transfer Tax Act (GrEStG).
- The deadline for filing real estate transfer tax returns is now one month in all cases.
- For undeveloped properties intended for development, the value in a developed state forms the tax base.
Furthermore, the law removes the time limit on the continued application of joint ownership for partnership entities for real estate transfer tax purposes (Section 24 GrEStG).
The new provisions regarding real estate transfer tax are scheduled to take effect on the day following the promulgation of the law and are to apply for the first time to acquisitions that are completed after the day following the promulgation of the law.
For transactions where the signing took place before the law was promulgated but the closing occurs thereafter, the signing is the relevant tax assessment date, and the new regulation already is to apply.
For a detailed overview of the recently enacted amendments to the Real Estate Transfer Tax Act, please refer to our Legal Insights dated March 3, 2026.
Amendments to the Trade Tax Act
In addition, the Ninth Tax Advisory Amendment Act raises the minimum rate for trade tax from 200 to 280%. This increase was already intended in the coalition agreement.
The amendments to the German Trade Tax Act are scheduled to take effect on the day following their promulgation and are to apply for the first time to the 2027 tax assessment period.
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