Investor Guide
2026-10-10 08:17

Share Deal (share purchase): You Buy the Company, and Its Past

In a share deal the investor buys the shares of the company that owns a property, not the property itself, so the land register does not change. It does not automatically avoid real estate transfer tax — share deals are taxed from a 90% threshold — and the buyer acquires the company with everything it owes and has done.

What it is

The property company, usually a GmbH, remains the registered owner; only its shareholders change. Transferring GmbH shares, and agreeing to do so, requires a notarial deed (§ 15(3), (4) GmbHG), and the price may not be paid in cash, crypto-assets, gold, platinum or gemstones (§ 16a(1) GwG).
Transfer tax applies when one acquirer, or a group of related acquirers, comes to hold at least 90% of the shares or of an economic participation (§ 1(3), (3a) GrEStG). It also applies when at least 90% pass to new shareholders within ten years (§ 1(2a), (2b) GrEStG). For acquisitions after 2 July 2026 the acquirer tests take precedence (§§ 1(3b), 23(28) GrEStG).
Under § 1(3) nos. 1 and 3 the tax arises when the share purchase agreement is signed or, if subject to a condition precedent, when the condition is met (§ 14 no. 1 GrEStG). It is charged on the property's value under the Valuation Act, not on the share price (§ 8(2) sentence 1 no. 3 GrEStG). The property company itself is liable, alone or alongside the acquirer (§ 13 nos. 5, 7, 8 GrEStG).

Why it matters to investors

A structure in which no test reaches 90% stays outside these rules but needs case-by-case tax advice: indirect holdings, related parties and the ten-year window all count (Part 9).
The company's past comes with the shares: its tax, contractual and litigation liabilities remain, so due diligence must cover the company, not only the property. In a GmbH the property stays on the books at its existing tax value; the buyer cannot depreciate what it paid above that value. Tax losses (over €1 million after ten years in our example) are generally forfeited if more than 50% of the shares pass to one buyer within five years. They survive only to the extent of taxable hidden reserves (§ 8c KStG; Part 11). And the land register's public faith protects acquirers of rights in land (§ 892 BGB), not buyers of shares, who must rely on warranties for the company's title.

What to check

• Every 90% test of § 1(2a) to (3a) GrEStG, including indirect holdings and transfers in the past ten years.
• Notification to the tax office within one month (§ 19(3) GrEStG); without a timely, complete notice, unwinding the deal brings no relief (§ 16(5) GrEStG).
• Corporate and tax due diligence, backed by warranties and tax indemnities.
• The company's tax book values and loss carry-forwards, priced in.
• For a foreign buying company reaching 90%, its beneficial owners in the Transparency Register (§ 20(1) GwG).
Related terms: Grunderwerbsteuer · GmbH · Transparenzregister
Sources: GrEStG §§ 1, 8, 13, 14, 16, 19, 23 (as amended on 29 June 2026); GmbHG § 15; GwG §§ 16a, 20; KStG § 8c; BGB § 892; Gordon Real Estate Group, "German Prime Retail", Parts 9 and 11. Legal position as of 10 October 2026.
Photo: Alex Block / Unsplash
This entry is general information and not legal or tax advice.