Until now, the sale of shares in real estate corporations was tax-exempt unless a shareholder directly or indirectly acquired at least 95% of the shares in the shareholder.
According to a law recently passed by the Bundestag, this limit will now be lowered to 90 %. In addition, a regulation that previously only applied to partnerships now also applies to corporations. According to this, changes in the shareholder structure of a corporation that take place within 10 years are subject to real estate transfer tax if the change in the shareholder structure comprises at least 90 % or more of the shares.
The new regulations apply to share transfers from 1 July 2021, which means that the old legal situation can still be used until the end of June.
So anyone planning to sell 100 % of the shares in their land-owning GmbH or other corporation should do so by the end of June this year. The prerequisite is that none of the buyers acquires 95 % or more of the shares. After 30 June 2021, these transactions will be subject to real estate transfer tax if the 90 % threshold is exceeded, regardless of whether the sale is made to one or more purchasers.
It is important that in the case of a sale of more than 90% but less than 95% of the shares to a purchaser, the assignment of the shares in addition to the conclusion of the purchase agreement also takes place before 1 July 2021. If the purchase agreement is concluded before then, but the assignment is not completed until after 30 June 2021, the new law already applies to this transaction.
If up to 90% shares are sold and transferred to one or more purchasers before 1 July 2021, the remaining shares may also be transferred to one or more other purchasers after 30 June 2021, as the transfers before 1 July 2021 will not be taken into account in the calculation of the ten-year period.
Under the new law (i.e. from 1 July 2021), a 100 % change of shareholder can only be avoided if the selling shareholder holds more than 10 % of the shares (for example 10.1 %) for at least 10 years and only then sells to a third shareholder.