Germany: Guidance on stock exchange exception under real estate transfer tax

A decree providing guidance on the application of the stock exchange exception under the real estate transfer tax

Guidance on application of stock exchange exception under real estate transfer tax

The government in October 2022 published a decree providing guidance on the application of the stock exchange exception under the real estate transfer tax.


The direct or indirect acquisition of shares in a real estate company is subject, if certain conditions are met, to real estate transfer tax in Germany. An exception for the trading of shares on a stock exchange was introduced effective 1 July 2021. The decree provides guidance on the application of the stock exchange exception and is applicable to all outstanding cases. In particular, the decree provides that three requirements must be cumulatively met in order to apply the stock exchange exception:

  • The traded shares must be shares in a corporation (Kapitalgesellschaft). For these purposes, securities that concern only shares in a corporation without conveying ownership to these shares (e.g., American Depositary Receipts) do not represent shares.
  • The shares must be admitted for trading on an "organized market" in Germany or in another EU/EEA member state or on a comparable third-country trading venue. In this regard, the regulated market on a stock exchange in Germany represents such an "organized market" (e.g., the securities exchange in Frankfurt am Main). By contrast, multi-lateral trading facilities (MTF) are not "organized markets" because they are not publicly authorized, regulated and monitored (e.g., the over-the-counter market in Germany (BörsG)). The EU Commission currently views comparable third-country trading venues as including only the regulated markets based in the United States, Hong Kong, and Australia. By contrast, the stock exchanges in Switzerland and the United Kingdom are currently not recognized as being comparable.
  • The shares must be transferred on account of a transaction via a privileged securities trading venue. In this case, contrary to the requirement above, an MTF may also be used. The tax authorities are of the view that there is generally no such transaction via a privileged securities trading venue in the case of an initial public offering, the issue of new shares as a result of a capital increase, securities lending, or a repurchase agreement.

If these three requirements are met, then the transfer of shares will not be considered when determining whether the tax-triggering participation threshold of 90% of the shares has been reached.

Read a December 2022 report [PDF 394 KB] prepared by the KPMG member firm in Germany


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