Real estate transfer tax (Grunderwerbsteuer)

Real estate transfer tax (Grunderwerbsteuer) is generally im-
posed on any transaction that causes a change in the ownership
of real property situated in Germany, or in the person empow-
ered to dispose of such property. Transferor and transferee,
whether or not resident in Germany, are jointly and severally liable;
in most cases, the contract specifes which party will pay the tax.
German real estate transfer tax is also triggered by direct or
indirect transfers to new partners of at least 95% of the interests
in a partnership owning German real property within a fve-year
period. The 95% requirement is determined in this case by
the interest in the property of the partnership (Beteiligung am
Gesellschaftsvermögen).

Furthermore, an acquisition of shares in a corporation or inter-
ests in a partnership owning German real property that results in
a direct or indirect holding of at least 95% of the shares is also
subject to German real estate transfer tax. The same applies if
the shares of such a corporation or the interests in such a part-
nership are not held by a legal entity or sole proprietor after the
acquisition, but rather by a group of controlled companies (e. G.
Members of a tax group).