ECJ Ruling on Portuguese Real Estate Transfer Tax: Implications for German RETT on Share Transfers

In its judgment of June 4, 2026 (C-837/24), the European Court of Justice (ECJ) ruled that Portuguese real estate transfer tax, which is triggered by the transfer of shares in a real-estate-holding corporation to another corporation, qualifies as an indirect tax on capital contributions and restructurings of corporations and thus conflicts with the Capital Accumulation Directive (2008/7/EC).

The plaintiff was a Portuguese public limited company, the equity of which has been provided inter alia  by contributing shares in a real estate-holding company. The Portuguese tax authorities took the view that the contribution of these shares in the real estate holding company was subject to Portuguese real estate transfer tax. The plaintiff challenged this, whereupon the Portuguese court referred the question to the ECJ as to whether the Portuguese regulations were compatible with the Capital Accumulation Directive.

The ECJ ruled that the formation of a corporation through the contribution of majority stakes in other corporations meets the requirements for a restructuring under Article 4(1)(b) of the Capital Accumulation Directive (2008/7/EC) and therefore may not be subject to an indirect tax (Article 5(1)(e)). Furthermore, the Portuguese real estate transfer tax is to be regarded as an indirect tax within the meaning of this provision, meaning that the Portuguese regulations on real estate transfer tax are incompatible with the Capital Accumulation Directive in this respect.

Although the ECJ’s decision concerned Portuguese law, it nonetheless has far-reaching implications for German real estate transfer tax as well. This is because, under German real estate transfer tax law as well, any (direct or indirect) change in the shareholder structure of real estate of companies holding real estate exceeding the 90% threshold is generally subject to German real estate transfer tax. This applies regardless of whether the change in shareholders is triggered by an acquisition or, for example, in the context of capital contributions or restructurings.

Against this backdrop, it is reasonable to assume that the legislature will have to respond to the ECJ’s case law. Taxpayers would be well advised to keep any related real estate transfer tax assessments open and, if necessary, pursue legal action.

Research Assistant Bartosz Paniak contributed to this article.

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