In June 2023, the Federal Ministry of Finance presented a key issues paper for a reform of the real estate transfer tax (Grunderwerbsteuer). The reform is intended to take effect on 01/01/2024.
The most recent reform, which in particular tightened certain structuring models involving real estate companies, took place in 2021. The rate of the real estate transfer tax is determined by the individual federal states. The tax rates range from 3.5% to 6.5%.
According to the key issues paper, the existing so-called supplementary tax triggers are to be abolished. These primarily concern the sale of shares in real estate companies. Under current law, a tax liability already arises if 90% of the shares in a real estate company (corporation or partnership) are transferred within ten years. This concept is to be abolished. Instead, share acquisitions are only to be taxed where 100% of the shares are consolidated in one hand. However, new provisions are to be introduced to prevent certain structuring arrangements.
In addition, certain transfers of real estate to partnerships as well as intra-group transfers are currently exempt from tax. These rules are to be reformed and simplified. Furthermore, a state opening clause is intended to allow the federal states to tax the acquisition of owner-occupied residential property at a reduced tax rate.