Insights
TAX & BUSINESS
Acquirer Group and Real Estate Company
The Budget Support Act 2025 provides for significant tightening in the area of real estate transfer tax (Grunderwerbsteuer, GrESt) on transfers of shares in companies whose assets include land. Two new terms have been introduced: acquirer group and real estate company.
With the current legislative amendment, the real estate transfer tax burden on so‑called share‑deals is to be aligned with that on asset‑deals. In such share‑deals, shares in a company that owns a piece of land are transferred, whereas in an asset‑deal the land itself is transferred directly to the buyer.
Under the amendment, real estate transfer tax becomes payable from 1 July 2025 if
In the case of consolidation in one hand, a taxable transaction exists not only when a single “acquirer” acquires shares amounting to 75% or more, but also when this is done by a so‑called acquirer group. An acquirer group exists when acquirers are combined for economic purposes under unified management or are under the dominant influence of a single person. This provision covers all legal entities, associations of persons and asset pools, meaning that, in addition to natural and legal persons, private foundations or public‑law corporations also fall within the definition. A group clause has been created for corporations, providing relief for intra‑group share transfers.
Real Estate Company
The amendment introduced the term “real estate company”. A real estate company exists when a company’s assets consist predominantly of land that is not used for its own operational purposes, or when the company’s core activity is the sale, leasing or administration of land. The sale of land that is used for the operational activities of a company shall continue to be classified as not a real estate company. This means that, for example, if a hotel building is part of the operating assets of a hotel‑operating GmbH, the company is not a real estate company.
In restructurings and the share‑deals described above that are carried out by real estate companies, a considerably higher real estate transfer tax burden arises: the tax is calculated on the market value (equivalent to the fair value) of the land held in the assets of the real estate company rather than on the land value. In addition, the real estate transfer tax rate increases from 0.5% to 3.5%.
Under the amendment, real estate transfer tax becomes payable from 1 July 2025 if
- within 7 years (previously 5 years) 75% (previously 95%) or more of the shares in a partnership or corporation are transferred to new shareholders, or
- 75% (previously 95%) of such shares are brought together directly or indirectly in the hands of an acquirer or in the hands of an acquirer group.
In the case of consolidation in one hand, a taxable transaction exists not only when a single “acquirer” acquires shares amounting to 75% or more, but also when this is done by a so‑called acquirer group. An acquirer group exists when acquirers are combined for economic purposes under unified management or are under the dominant influence of a single person. This provision covers all legal entities, associations of persons and asset pools, meaning that, in addition to natural and legal persons, private foundations or public‑law corporations also fall within the definition. A group clause has been created for corporations, providing relief for intra‑group share transfers.
Real Estate Company
The amendment introduced the term “real estate company”. A real estate company exists when a company’s assets consist predominantly of land that is not used for its own operational purposes, or when the company’s core activity is the sale, leasing or administration of land. The sale of land that is used for the operational activities of a company shall continue to be classified as not a real estate company. This means that, for example, if a hotel building is part of the operating assets of a hotel‑operating GmbH, the company is not a real estate company.
In restructurings and the share‑deals described above that are carried out by real estate companies, a considerably higher real estate transfer tax burden arises: the tax is calculated on the market value (equivalent to the fair value) of the land held in the assets of the real estate company rather than on the land value. In addition, the real estate transfer tax rate increases from 0.5% to 3.5%.