I. Issue and View of the Tax Authorities

In practice, entering into a share purchase agreement (so-called signing) and the transfer of shares (so-called closing) often take place at different times. The tax authorities take the view that, for real estate transfer tax purposes, two separate taxable events arise in such share deals where signing and closing do not coincide (so-called time‑based approach – zeitpunktbezogene Betrachtung). Signing is deemed taxable under section 1 para. 3 GrEStG, as it establishes the claim to transfer the shares. The transfer the shares is taxable under section 1 para. 2b GrEStG, which covers changes in the shareholder structure of a corporation (Kapitalgesellschaft). Pursuant to section 1 para. 2a GrEStG, this applies correspondingly to partnerships. A threshold of at least 90% of the shares applies for all provisions.
However, under the wording of the law, taxation under section 1 para. 3 GrEStG arises only insofar as taxation under section 1 para 2a and para. 2b GrEStG does not apply. The tax authorities hold the view that the priority of section 1 paras. 2a and 2b GrEStG over section 1 para. 3 GrEStG only applies if the requirements of section 1 para 3 GrEStG and section 1 para. 2a or para. 2b GrEStG are met simultaneously (time‑based approach). Where the relevant tax‑triggering dates for signing and closing differ, both events are to be assessed separately. This can result in two separate taxable transfers for real estate transfer tax purposes and, consequently, double taxation of the same underlying transaction.
According to the tax authorities, such double taxation can be avoided only by applying the provisions of section 16 para 4a GrEStG, which provides for the cancellation of the real estate transfer tax assessed pursuant to section 1 para 3 GrEStG (for the signing) once closing has occurred. However, this provision applies only if the transaction subject to section 1 para. 3 GrEStG has been fully reported within the statutory notification period. Since this period is only 14 days, such cancellation is often unavailable in practice.

II. Decision of the BFH

This year, several Fiscal Courts (Finanzgerichte) (Fiscal Court Berlin‑Brandenburg, decision of 9 January 2025 – 12 V 12130/24 as well as Fiscal Court Baden‑Württemberg, decision of 16 May 2025 – 5 V 846/25) have assessed the legality of the tax authorities’ approach to the signing-closing problem in interim‑relief proceedings (einstweiliger Rechtsschutz). Both courts rejected applications to suspend enforcement of the double real estate transfer tax assessments (for signing and closing) and found no serious doubts as to the legality of the administrative practice.
The BFH has now taken a different view in its much‑discussed decision of 9 July 2025 (Az. II B 13/25). The case concerned whether, in a transfer of shares in a real estate-owning corporation, two separate transactions subject to real estate transfer tax arise if signing and closing occur at different times. All shares in a company holding real estate in Germany were transferred; signing and closing took place on different dates. The real estate transfer tax notification was timely filed for signing, but not for closing.
The tax office assessed real estate transfer tax twice (pursuant to section 1 para. 3 no 1 GrEStG for signing and pursuant to section 1 para. 2b sentence 1 GrEStG for closing). The BFH expressed serious doubts about the legality of this administrative practice and suspended enforcement. According to the BFH, there are serious doubts regarding the legality of a double assessment of real estate transfer tax, at least where, at the time of assessing the tax under section 1 para 3 GrEStG, the tax office was already aware that the closing had taken place. The BFH stated that the subsidiarity of section 1 para. 3 GrEStG applies to all elements of that section 1 para. 3 GrEStG and that no temporal limitation can be inferred from the provision. According to the court, the introduction of section 16 para. 4a GrEStG did not eliminate the existing subsidiarity of section 1 para. 3 GrEStG.
The Federal Fiscal Court has maintained this approach in subsequent decisions. For the same reasons, in its decision of 27 October 2025 (Case No. II B 47/25), the Court granted suspension of enforcement of the tax assessment for the signing in connection with an acquisition transaction under section 1 para. 3 no. 3 GrEStG.
However, it must be noted that challenging the wrong assessment can have serious consequences: In the BFH’s decision of 16 September 2025 (Az. II B 23/25), the taxpayer mistakenly contested the assessment for closing (pursuant to section 1 para. 2b GrEStG) instead of the assessment for signing (pursuant to section 1 para 3 GrEStG). The BFH refused to suspend enforcement in this case, holding that there were no serious doubts as to the legality of the assessment under section 1 para. 2b GrEStG. The fact that the taxpayer had already paid tax once under section 1 para 3 GrEStG did not change this outcome, as section 1 para 2b GrEStG is not subordinate to section 1 para. 3 GrEStG. The taxpayer could thus have avoided double taxation only by obtaining cancellation of the tax assessed under section 1 para. 3 GrEStG pursuant to section 16 para. 4a GrEStG. However, as he failed to give notice within the deadline, this option was unavailable, meaning that he had to accept the double assessment of real estate transfer tax.

III. Practical note

The BFH’s decision was issued in proceedings for interim relief. A decision in the main proceedings has not yet been delivered. The tax authorities continue to adhere to the (identical) decrees of the supreme state tax authorities dated 5 March2024 (BStBl 2024 I, S. 383), and thus are likely to maintain their position that “double” taxation may arise in signing-closing cases. As a result, the principle of taking the safest course dictates that real estate transfer tax events should continue to be duly and timely reported to the tax office to preserve the option of seeking cancellation under section 16 para. 4a GrEStG.