Real estate transfer tax for share deals

What sounds illogical at first is unfortunately now a reality in some cases of real estate share deals.

Due to serious legal doubts about this practice of the tax authorities, we have now been able to obtain a stay of execution for an investor, even in the case of actual or supposedly incomplete notifications (which unfortunately brings with it more uncertainties than one might think due to the only two-week deadline and the complex requirements), our experience shows that the approach of the tax authorities should by no means go unchallenged.

Typical constellation: Due to the time lag between the share purchase agreement (signing) and the transfer of the shares to the buyer (closing), the tax office assesses real estate transfer tax twice - once in accordance with § 1 Abs. 3 no. 3 GrEStG for the signing and once in accordance with § 1 Abs. 2b GrEStG for the closing.

In our case, the authorities immediately rejected the application for an AdV against the decision on the basis of § 1 Abs. 3 No. 3 GrEStG. Our law firm took over the case and applied to the competent tax court for an AdV.

At the same time, we lodged an appeal against the rejection of the ad-validation in order to test whether the authorities would prevent a quick court decision on the tax issue. It cannot be ruled out that the tax authorities would like to prevent an early judicial assessment of the extremely questionable thesis of a double real estate transfer tax for share purchases.

In the case of share deals involving real estate, the recommendation remains that the notifications pursuant to § 19 GrEStG must be submitted on time and, if the tax is assessed twice, the application pursuant to § 16 para. 4a GrEStG must be submitted, even if the notifications are incomplete or forgotten, our experience shows that the assessment pursuant to § 1 Abs. 3 no. 3 GrEStG must be opposed at all costs.