The MoPeG of August 10, 2021 will come into force on January 1, 2024 and largely abolish the “Gesamthand” (joint ownership) as a statutory criterion of partnership law. According to the BMF, this will remove the justification for the different treatment of partnerships and corporations for real estate transfer tax purposes, such as tax-neutral transfers of real estate to and by partnerships. With the abolition of the “Gesamthand”, the factual reference point of these real estate transfer tax benefits would cease to exist. In the absence of a justification, there can be no new tax benefits exclusively for partnerships. Moreover, the current regulations presuppose retention periods that cannot be observed without the statutory “Gesamthand”. This would lead to a (non-culpable) violation of the retention period and thus to subsequent taxation of transfers that have already taken place.
Of the three solutions known so far ("minimal approach": no automatic violation of the retention periods; "mediatory solution": extend existing tax benefits to corporations in a legal form-neutral manner), the BMF favors the "great solution" in the discussion draft, which is intended to extend the legal form neutrality to share deal situations as well.
This "great solution" obviously takes up the real estate transfer tax modernization model (so-called GrESt-MoMo), which was recently presented by the "Working Group on Real Estate Transfer Tax":
- The statues concerning the share deals are adjusted in such a way that instead of the previous rigid 90% limit and the ten-year period, the unification of all shares, i.e. 100%, is decisive.
- Rigid limits and deadlines are to be replaced by the undefined legal terms of "acquisition group" and "serving interest", which in turn are substantiated by non-exhaustive standard examples.
- The term "acquisition group" is intended to refer to co-investor arrangements in which various acquirers have objectively coordinated with each other in terms of the objective and timing of the acquisition of the real estate.
- The "serving interest" includes the shares held by another person in the interest of the acquirer or acquisition group. This is similar to the case law on own shares and disenfranchised shareholders. These shares are not included in the determination of the shareholding rate, so that the 100% limit will be reached more quickly.
Due to the undefined legal terms, in the future also those arrangements are to be subject to real estate transfer tax that were previously able to take advantage of the rigid limits and deadlines. Furthermore, there will be considerable questions of interpretation, and a legally secure treatment of the real estate transfer tax as desired by the Ministry appears questionable. Presumably, only case law will provide conclusive clarification in individual cases.
Further amendments relate to a property-related group clause, which is intended to exempt intra-group transfers from real estate transfer tax (funnel solution), as well as the recognition of unit deals, in which the property held for the account of investment funds is not attributed solely to the capital management company, but also to the investment fund concerned, so that the transfer of shares in investment funds also triggers real estate transfer tax .
In terms of timing, the ministry is very ambitious and would like the changes to come into force by January 1, 2024. Whether and which of the proposed changes will become law as planned will be decided after intensive legal policy discussions between the federal government and the states. The states, which have legislative authority in this respect, have not yet officially positioned themselves . The challenge for all with real estate investment for the next months is to accompany the development closely. Some constructions will have to be assessed very critically, while some other situations may even fall outside the scope of taxation.
Authored by Mathias Schönhaus.
