The separation of Signing and Closing stages in the context of a share deal and the associated fulfilment of multiple acquisition transactions pursuant to Section 1 German Real Estate Transfer Tax Act (GrEStG) has already been subject of our newsletter on several occasions (most recently in Q4/2025). The divergence in the views of German tax authorities and legislation of the German Federal Fiscal Court (BFH) highlighted therein has now been resolved by an amendment to the German Real Estate Transfer Tax Act.
I. The Path to the New Legislation
The path to the new legislation coming into force was a winding one. On 8 May 2026, the German Federal Chamber (Bundesrat) rejected the Government’s original draft of 12 March 2026 (BT-Drucks. 21/4550). The reason was the rejection of the relief allowance for employees in connection with the war in Iran, which was also part of the proposed legislation.
On 19 May 2026, the parliamentary groups of the political parties CDU/CSU and SPD once again tabled a ‘Draft of a Ninth Act Amending the Tax Consultancy Act and Tax Law’ in the German Federal Parliament (Bundestag; BT-Drucks. 21/6002), containing the relevant amendments to the German Real Estate Transfer Tax Act. The content of this draft remained unchanged. Following adoption by the Bundestag and approval by the Bundesrat, the Act was published in the German Federal Law Gazette on 2 July 2026 (BGBl. I 2026, 197).
II. The Content of the Act
The government’s guiding principle behind this amendment is the abolition of potential double taxation of a single set of facts. The aim of triggering taxation in share-deal cases solely through the contractual obligation to transfer is to be achieved by a ‘reversal’ of the taxable events.
To this end, the Act provides for the insertion of a new Section 1 para. 3b GrEStG, which is intended to preclude the application of para. 2a and para. 2b where a taxable event under para. 3 is fulfilled. Consequently, Section 1 para. 3 GrEStG is amended. The phrase ‘soweit eine Besteuerung nach den Absätzen 2a und 2b nicht in Betracht kommt` (English translation of the law: ´insofar as taxation under para. 2a and para. 2b is not applicable’) is deleted. Section 1 para. 3a GrEStG is also amended to the extent that it no longer refers to Section 1 para. 2a and para. 2b GrEStG.
This brings the legislation into line with the fundamental concept of the German Real Estate Transfer Tax, according to which the mere assumption of an obligation to acquire real estate is intended to trigger the tax liability. Whereas previously the provisions of Section 1 para. 2a and para. 2b GrEStG, which are linked to the corporate structure and thus to the Closing of a share deal, were applicable, a share deal is to be assessed primarily under Section 1 para. 3 GrEStG in future. This is linked to the assumption of an obligation to transfer company shares and not, specifically, to the resulting shareholder structures.
In conjunction with the substantive amendments outlined above, the provisions of Section 16 para. 4a and para. 5 sentence 2 GrEStG relating to the taxation procedure are also repealed without replacement. As taxation is now linked solely to the binding transaction, it is no longer necessary to revoke a tax assessment on the grounds that Signing and Closing took place at different times.
The liability for tax payment has also been revised. The company holding the property in each case is now, alongside the purchaser of the shares, liable for Real Estate Transfer Tax and has been included among those subject to the notification obligation (Section 19 GrEStG).
III. The Advantages and Disadvantages
The legislative aim of preventing double taxation in a share deal is achieved by the new provisions. If at least 90 per cent of the shares in a company are sold or consolidated, this triggers a transfer according to Section 1 para. 3 GrEStG. Furthermore, the scope of application of Section 1 para. 2a and 2b GrEStG is not triggered due to the now applicable subordination of these provisions. Only one taxation event occurs. The guiding principle in German real estate transfer tax law of prior taxation of the conclusion of a contractual obligation (Signing) is thus also applied in the case of a traditional share deal.
However, if Section 1 para. 2a and para. 2b GrEStG do not apply in any case involving a share deal, the converse question arises as to whether these provisions retain any scope of application at all. The explanatory memorandum to the Act cites cases in which real estate was acquired between Signing and Closing. This link has been criticised because the acquisition of the real estate already triggers a taxable acquisition transaction. On the other hand, there would also be two taxable acquisition transactions if the real estate was acquired prior to Signing.
Furthermore, other cases are conceivable in which the conditions of Section 1 para. 2a or para. 2b GrEStG are initially met and Section 1 para. 3 GrEStG applies in a transaction separate in time from this (or vice versa). The difference stems from the differing conditions set out in the respective provisions. Whilst para. 2a and para. 2b are based on the transfer of 90 per cent of the shares, irrespective of the identity of the acquirer, within a period of ten years, para. 3 refers, without any time limit, to the consolidation of 90 per cent of the shares in the hands of a single acquirer.
IV. Implications for Advisory Practice
The above comments have direct implications for legal and tax advice. The new provisions came into force upon their promulgation on 2 July 2026. Section 23 para. 28 and para. 29 GrEStG clarify the circumstances to which the new provisions apply. Acquisitions taking place after 2 July 2026 will therefore be assessed directly in accordance with the new legal framework. The same applies to cases where a binding agreement (Signing) was concluded before the new provisions came into force, but the transfer (Closing) has not yet taken place. Such cases are also already assessed in accordance with the new legal framework.
With a view to future share deals, the new provisions – in particular the points of criticism outlined above – should be taken into account in any structuring considerations in order to prevent adverse effects. In this context, the following issues in particular need to be clarified:
- Planning of the timing of the acquisition of (additional) real estate
- Planning of restructuring measures with a view to complying with Section 1 para. 2a or para. 2b GrEStG and Section 1 para. 3 GrEStG
- Provisions in the underlying agreements regarding the payment of real estate transfer tax and compliance with the obligation to notify the tax authorities