The German Federal Ministry of Finance has published a discussion draft on the amendment of the German real estate transfer tax. This amendment is in response to the reform of the German Act to Modernize the Law on Partnerships (Gesetz zur Modernisierung des Personengesellschaftsrechts (MoPeG)), which will fundamentally change the legal treatment of partnerships as of January 1, 2024, and thus will also have consequences under German tax law, specifically German real estate transfer tax. In particular, the discussion draft will address the taxation of share acquisitions in real estate (holding) companies, and specifically, it is about the so-called share deals. Whether the amendment of the real estate transfer tax proposed in the discussion draft properly addresses these issues, or if it misses the mark, remains to be seen.

In this beinformed, we wish to understand the draft to reform the German real estate transfer tax in general terms; we will have to shed light on the details later in an upcoming newsletter when the discussion draft is further developed in the legislative process.