BBG 2025: Changes to Real Estate Transfer Tax

Overview

In our BTN from 05.05.25, we reported on the draft of the Budget Accompanying Act 2025 ("BBG 2025"). During the deliberations in the Budget Committee on June 3, 2025, changes were made, among other things, to the Real Estate Transfer Tax and the Energy Crisis Contribution – Electricity (“EKBS”). Additionally, changes were adopted regarding the Standard Consumption Levy (“NoVA”) and the official mileage allowance (“Kilometergeld”).
 

Real Estate Transfer Tax Act

To begin with, it should be noted that the tightening of the Real Estate Transfer Tax in the case of share deals will be implemented despite discussions in the Budget Committee. In particular, the reduction of the threshold to 75%, the inclusion of indirect share transfers, and the higher taxation of real estate companies remain. In certain areas, adjustments have been made compared to the initial government proposal, which are outlined below.

Unification of shares – Indirect Share transfers

Originally, the definition of indirect share transfers referred to a single person or group of persons which were defined as individuals, partnerships, and corporations. Now, the terms acquirer and acquirer group are used instead, which includes all legal entities, partnerships, and pools of assets (“Vermögensmasse”). As such, private foundations, associations (“Vereine”) or public law entities (“KöR”) are also covered by the definition of the acquirer.

Substantively, there is no change in the definition of the "acquirer group." This group exists when acquirers are united for economic purposes under common control or under the dominant influence of one person.

Exemptions for Restructurings under the Reorganisation Tax Act (UmgrStG)

Previously, the draft did not provide for any tax exemptions, particularly for intra-group transfers (no group exemption clause). Now, indirect share consolidations or acquisitions resulting from restructurings under the Reorganisation Tax Act (UmgrStG) are not considered taxable events, provided the parties involved belong to the same acquirer group.

However, intra-group transactions outside the scope of the UmgrStG are not exempt (e.g., indirect share unification resulting from a sale at a higher group level). Also, direct shareholder changes within a group are not exempt. For restructurings of real estate companies that do not fall under the exemption rule, the real estate transfer tax is calculated at 3.5% of the fair market value.

Differential Taxation

Differential taxation is extended from previously applying only to the same person to now covering acquirers or acquirer groups as well.

Multiple Share Consolidations – Priority Rule

When share unifications occur at multiple group levels, "priority rules" are now defined as follows:

• If the same transaction meets the conditions for both a direct and an indirect acquisition, the direct acquisition takes precedence.
• If the same acquisition meets the conditions for multiple indirect acquisitions, the one closest to the real estate-owning company takes precedence.

Additions to Transitional Rules and Deadlines

Acquisitions as defined in the currently valid § 1 para. 2a GrEStG are considered acquisitions under § 1 para. 3 no. 1 GrEStG (i.e., direct shareholder changes) for differential taxation purposes and may benefit from differential taxation.

In the future, a (direct) shareholder change of 75 % or more within 7 years will trigger real estate transfer tax. Regarding deadlines, the following additions apply:

• The 5-year period for changes in the shareholder structure of partnerships before July 1, 2025, remains applicable.
• For corporations, changes in shareholder structure occurring before July 1, 2025, are disregarded.

If as of June 30, 2025, 75% of shares are already held and a share unification has not yet been triggered, any future change in the ownership percentage (unless it drops below 75%) will trigger real estate transfer tax. However, this only applies if a taxable share unification had not already occurred under the current law.

Energy Crisis Contribution – Electricity (EKBS)

Maximum Amount for Eligible Investments and attribution

The maximum deductible amount for eligible investments is now set at EUR 25 per MWh of electricity, instead of the originally proposed EUR 20 per MWh of electricity in the BBG 2025 draft. Additionally, the attribution of eligible investments from affiliated companies that are themselves subject to the Energy Crisis Contribution is extended to collection periods 3 to 7.

The changes take effect on July 1, 2025. However, the attribution rule applies from April 1, 2025, and the remaining provisions from May 2, 2025.

Standard Consumption Levy (NoVA)

Motor vehicles up to 3.5 tons gross weight that are primarily used for goods transportation are again exempt from the Standard Consumption Levy (NoVA), as was the case up to July 2021. This mainly concerns classic vans and flatbed trucks. Detailed provisions—such as regarding the maximum number of seats and equipment—aim to prevent abuse.

This change takes effect on July 1, 2025.

Mileage Allowance

The mileage allowance for bicycles and motorcycles will be reduced to 25 cents/km. This change takes effect on July 1, 2025.

Conclusion

Due to the amendments made by the Budget Committee, adjustments and changes have been made compared to the government’s original proposa regarding the Real Estate Transfer Tax and EKBS, as well as NoVA and the official mileage allowance.

The final resolution is planned for June 18, 2025, in the National Council and remains to be seen.