BFH doubts double real estate transfer tax in cases where closing date is known

In a recently published decision dated July 9, 2025 (II B 13/25 - AdV), the German Federal Fiscal Court (“BFH”) expresses serious doubts in proceedings for a stay of execution about the tax authorities’ view that real estate transfer tax (“RETT”) should be assessed twice if the signing (contractual transaction) and closing (transaction in rem) take place at different times, and the tax office is aware of the closing, i.e., the completed transfer of shares, when issuing the real estate transfer tax assessment notices. 

Facts: Separate signing and closing 

In summary, the decision was based on the following facts: In the acquisition of a real estate-owning corporation, there were approximately three weeks between the signing and closing, and the real estate remained unchanged. The tax office was only informed by the notary submitting the purchase agreement after closing. The tax office subsequently assessed real estate transfer tax twice, once for the signing, pursuant to Art. 1 (3) No. 1 of the Real Estate Transfer Tax Act (GrEStG), and again for the closing, pursuant to Art. 1 (2b) GrEStG. 

Criticism by the BFH: Doubts about the interpretation of Art. 1 (3) of the Real Estate Transfer Tax Act (GrEStG) 

The Federal Fiscal Court has serious doubts about the tax authorities' view that the statutory priority of Art. 1 (2b) GrEStG at closing over Art. 1 (3) GrEStG at signing applied only when signing and closing take place at the same time, and therefore real estate transfer tax should be assessed once only in this case. The tax authorities currently assume that real estate transfer tax must be levied twice if signing and closing do not take place at the same time, once at signing and once at closing.  

No temporal “competition” could be inferred from the introductory sentence of Art. 1 (3) GrEStG, neither from the wording nor from the explanatory memorandum to the law. The restriction that the transaction was only taxed if taxation under Art. 1 (2b) GrEStG is not possible applies equally to all cases. The correction provision in Art. 16 (4a) and (5) GrEStG, according to which the real estate transfer tax is waived upon signing if both transactions have been reported in full and in a timely manner, did not change this. The BFH therefore has serious doubts as to whether and to what extent the introduction of Art. 16 (4a) and (5) GrEStG could result in a restriction of the priority provision of Art. 1 (3) GrEStG, as this was not expressed in the wording of Art. 1 (3) GrEStG. 

In the Federal Fiscal Court’s opinion, the specific procedural rules of Art. 16 (4a) and (5) GrEStG are not required to resolve the present case, as a change was simply provided for in Art. 164 (2) of the German General Tax Code (AO), since the assessment notices were issued subject to review.  

Legal consequences and outlook: What does the decision mean? 

Since the present decision concerned preliminary injunction proceedings, it remains to be seen whether the Federal Fiscal Court will rule accordingly in the main proceedings. 

Until then, the issue of double real estate transfer tax upon signing and closing will remain, and the relevant parties are still required to submit timely and complete notifications upon signing and upon closing.  

If the main proceedings also result in a corresponding decision, it would be virtually impossible, at least in cases where signing and closing have already taken place (e.g., previously undisclosed, newly discovered facts), for real estate transfer tax to be levied twice, at signing and closing, as part of a tax audit because in these cases, the closing will always have to be considered “known” in retrospect.