When you buy a German company, you often buy real estate along with it: factory buildings, warehouses, offices. Even if only shares in the company change hands, real estate transfer tax (Grunderwerbsteuer) can arise. New rules have applied since July 2026. They move the tax point to the signing of the contract, extend the deadline for notifying the tax office and make the buyer the primary taxpayer. For investors from abroad, this means: the planning must be in place before you sign.
Real estate transfer tax in two minutes
Real estate transfer tax is a tax on the acquisition of real property in Germany. A direct purchase of real property is generally subject to it (§ 1 Abs. 1 GrEStG). If, on the other hand, an investor buys shares in a company that owns real property (a share deal), the tax only applies under certain conditions. The federal statute sets a tax rate of 3.5 percent (§ 11 GrEStG). However, the federal states may set their own rate (Art. 105 Abs. 2a GG). What counts, therefore, is the state in which the property is located. In a share deal, the tax is not based on the purchase price of the shares but on a statutory property value (§ 8 Abs. 2 GrEStG).
Whether an asset deal or a share deal is the better fit depends on more than this tax. The basics are covered in our article Buying a Business. In a transferring restructuring out of insolvency, individual assets are bought; each purchase of real property is then taxable in its own right (see Buying a Company Out of Insolvency).
When a share purchase becomes taxable
All triggers revolve around the same threshold: 90 percent. A share deal becomes taxable when
- shares are united in one hand: at least 90 percent of the shares are united in the buyer or in companies that are dependent on or control the buyer (§ 1 Abs. 3 GrEStG);
- an economic interest arises: direct and indirect shareholdings are added up and together reach 90 percent (§ 1 Abs. 3a GrEStG);
- the shareholder base changes: within ten years, at least 90 percent of the shares pass to new shareholders (§ 1 Abs. 2b GrEStG for corporations, § 1 Abs. 2a GrEStG for partnerships).
All three triggers also cover indirect changes. A corporate shareholder is treated in full as a new shareholder if at least 90 percent of its own shares change hands; this applies at every level of a shareholding chain (§ 1 Abs. 2b GrEStG). A sale or reorganisation at the parent company abroad can therefore trigger real estate transfer tax on a property in Germany.
There is a relief for intra-group restructurings (§ 6a GrEStG). Among other things, it requires the controlling company to hold at least 95 percent for five years before and five years after the transaction. According to its wording, it covers conversions, contributions and other transactions based on the articles of association; the provision only mentions foreign law for EU and EEA states. An ordinary share purchase is not covered.
What changed in July 2026
The Ninth Act Amending Provisions of Tax Advisory Law and Tax Law was promulgated on 2 July 2026. Its amendments to the Real Estate Transfer Tax Act apply to acquisitions completed after 2 July 2026 (§ 23 Abs. 28 GrEStG).
| Topic | Until 2 July 2026 | Since 3 July 2026 |
|---|---|---|
| Signing and closing | Tax could be assessed on both the signing of the contract and the transfer of the shares (closing); the assessment for the signing was only cancelled on application | The signing takes precedence; the later transfer of the same shares is not taxed again (§ 1 Abs. 3b GrEStG) |
| Notification deadline | Two weeks where there is a domestic link | One month from becoming aware, for all parties involved (§ 19 Abs. 3 GrEStG) |
| Taxpayer | Usually the property-owning company, because the closing took precedence | Usually the acquirer; the property-owning company is jointly liable (§ 13 Nr. 5 GrEStG) |
For contracts signed before 3 July 2026 where the shares only transfer afterwards, a transitional rule applies: tax is only levied under § 1 Abs. 3 and 3a (§ 23 Abs. 29 GrEStG). Real property that the company only acquires between signing and closing can still be taxed at closing; this is how the explanatory memorandum to the act describes it.
What this means for your deal
1. Signing is the tax point
According to the explanatory memorandum, the tax generally arises when the purchase agreement is concluded. If the validity of the contract itself depends on a condition, the tax only arises once that condition is met (§ 14 Nr. 1 GrEStG). Whether a closing condition in the purchase agreement has this effect is a matter of contract drafting. This concerns, for example, clearance in investment screening. Clarify this with the notary and your legal advisers before signing.
2. The notification is your insurance if the deal falls through
The taxpayers themselves must file the notification, including a foreign buyer (§ 19 Abs. 1 GrEStG). The notification counts as a tax return; filing late risks a late-filing surcharge (§ 19 Abs. 5 and 6 GrEStG). Even more important: if an acquisition is reversed, for example because contractual conditions are not met, the tax can be cancelled on application (§ 16 Abs. 1 GrEStG). But this only applies if the transaction was notified on time and in full (§ 16 Abs. 5 GrEStG).
“Those required to notify must notify the transaction within one month of becoming aware of the notifiable transaction, even if the transaction is exempt from taxation.”
§ 19 Abs. 3 GrEStG (Real Estate Transfer Tax Act, unofficial translation)
For shares, the notification requires, among other things, the company’s name and place of management, the shares concerned and, where several parties are involved, an overview of the shareholdings (§ 20 Abs. 2 GrEStG). In a group chain, this is where the real work lies.
3. The purchase agreement decides who pays
Where shares are united, the acquirer and the company that owns the property are jointly liable for the tax (§ 13 Nr. 5 GrEStG). The tax office can therefore also pursue the acquired company. Who bears the tax economically must therefore be expressly set out in the purchase agreement.
4. The Transparency Register also applies to the buyer
A company based abroad must report its beneficial owners to the German Transparency Register if shares within the meaning of § 1 Abs. 3 GrEStG are united in it or it acquires an economic interest under § 1 Abs. 3a GrEStG. This only does not apply if it has already submitted this information to a register in another EU member state (§ 20 Abs. 1 GwG). An acquisition vehicle from a third country is typically affected.
“International buyers often put real estate transfer tax near the bottom of their list. But since July 2026, the signing is what counts. If you then miss the notification, you may also lose the right to have the tax cancelled if the deal falls through.”
Fatma Tabak, tax advisor · TABAK Steuerberatung
A typical case
Suppose a Chinese industrial investor acquires all the shares in a German automotive supplier with its own factory site through an acquisition vehicle. The 90 percent threshold is then reached, and real estate transfer tax generally arises on signing. The buyer notifies the transaction within one month and registers its beneficial owners in the Transparency Register. The purchase agreement sets out who bears the tax and what happens if clearance in the investment screening is not granted. Together with our partner tax firm TABAK Steuerberatung, we map the shareholding chain, prepare the notification and coordinate with the notary and legal advisers.
Frequently Asked Questions
Is real estate transfer tax due if I buy 100 percent of a GmbH that owns real property?
Yes. If at least 90 percent of the shares are united in your hands, the transaction is taxable (§ 1 Abs. 3 GrEStG). Since July 2026, the tax primarily attaches to the purchase agreement (§ 1 Abs. 3b GrEStG).
Can a change of ownership at our foreign parent company trigger real estate transfer tax in Germany?
Yes, that is possible. The triggers also cover indirect changes. A corporation in the chain is treated as a new shareholder if at least 90 percent of its shares change hands (§ 1 Abs. 2b GrEStG).
How high is real estate transfer tax on a share deal?
The tax rate is set by the federal state in which the property is located (Art. 105 Abs. 2a GG); the federal statute sets 3.5 percent (§ 11 GrEStG). In a share deal, the tax base is the statutory property value, not the purchase price of the shares (§ 8 Abs. 2 GrEStG).
What happens to the tax if the closing fails?
If the acquisition is reversed, the tax can be cancelled on application (§ 16 Abs. 1 GrEStG). The prerequisite is that the transaction was notified on time and in full (§ 16 Abs. 5 GrEStG).
Does a foreign acquisition company have to register in the Transparency Register?
Yes, if at least 90 percent of the shares in a company owning German real property are united in it or it acquires a corresponding economic interest, unless the information is already held by a register in another EU member state (§ 20 Abs. 1 GwG).
Sources
- BGBl. 2026 I Nr. 197 – Ninth Act Amending Provisions of Tax Advisory Law and Tax Law
- § 1 GrEStG – taxable acquisitions
- § 13 GrEStG – taxpayers
- § 16 GrEStG – reversal
- § 19 GrEStG – notification obligation of the parties
- § 23 GrEStG – scope of application
- § 6a GrEStG – intra-group restructurings
- Bundestag document 21/6002 – draft bill with explanatory memorandum
- § 20 GwG – transparency obligations
- Art. 105 GG – legislative competence, tax rate set by the federal states
More than 20 years advising entrepreneurs, investors and family businesses. Reserved tax services are provided by our partner tax firm, TABAK Steuerberatung.
Author profile →Planning a share deal involving real estate?
We check the 90 percent thresholds along your shareholding chain, prepare the notification before signing and align the purchase agreement, Transparency Register and tax.