Whether a property belongs to a company's assets is now defined by statute.
What is changing
A property belongs to the assets of the company that most recently realised a basic taxable event under § 1 Abs. 1 GrEStG with respect to the property, provided and as long as the acquisition has not been reversed.
To prevent abusive arrangements, the law provides that the new attribution rule does not apply to
- transactions that have been reversed, and
- properties that have been re-acquired,
to the extent that this would result in avoiding a taxable acquisition event.
Without this statutory provision, a company could, for example, be stripped of its real estate, its shares could then be transferred – without triggering a supplementary taxable event – and the previously concluded property transaction could subsequently be unwound.
Entry into force
Under the adopted version, the new rule applies for the first time to acquisition events under § 1 Abs. 2a to 3a GrEStG that are realised after the date of promulgation of the Annual Tax Act (Jahressteuergesetz, JStG) 2024. Acquisition events under § 1 Abs. 1 and 2 GrEStG that were realised before the day following the promulgation of the JStG 2024 must also be taken into account.
Frequently asked questions
Frequently asked questions
When does a property belong to a company's assets for real estate transfer tax purposes?
A property belongs to the assets of the company that most recently realized a basic taxable event under § 1 Abs. 1 GrEStG (e.g. a purchase agreement) concerning the property. This attribution applies as long as the acquisition has not been reversed. The statutory definition clarifies which company a property is to be attributed to for real estate transfer tax purposes.
Which arrangements is the new attribution rule intended to prevent?
The rule is designed in particular to prevent a company from being stripped of real estate, after which its shares are sold without triggering a supplementary taxable event, and the original property transaction is subsequently reversed. Accordingly, the attribution rule does not apply to reversed legal transactions or repurchased properties to the extent that this would avoid an acquisition event.
When does the new attribution rule for real estate transfer tax apply?
The new rule applies for the first time to acquisition transactions under § 1 Abs. 2a to 3a GrEStG that are realised after the date of promulgation of the Jahressteuergesetz 2024 (Annual Tax Act 2024). Acquisition transactions under § 1 Abs. 1 and 2 GrEStG realised before this cut-off date must also be taken into account.
Which acquisition transactions interrupt the attribution of a property to the company?
Attribution ends when the underlying acquisition transaction is reversed. However, the original attribution remains in place to the extent that the reversal or a reacquisition would result in circumventing a transaction subject to real estate transfer tax. This ensures that abusive unwindings have no tax effect.