Share deal: Vonovia bypasses real estate transfer tax when taking over Deutsche Wohnen

Vonovia recently succeeded in taking over a majority stake in Deutsche Wohnen in its third attempt. However, the company from Bochum does not have to pay real estate transfer tax for the mega-deal. The group uses a tax loophole.

Germany’s largest real estate group Vonovia now holds 87.6 percent of the Deutsche Wohnen housing company – the Bochum-based company did not have to pay real estate transfer tax for this takeover. Vonovia confirmed this to the rbb on Tuesday evening. Vonovia benefits from a regulation that has been used particularly often in Berlin in recent years: the real estate transfer tax is not levied on purchases of less than 90 percent of shares.

These so-called “share deals” accounted for up to 31 percent of transactions in the capital over the past six years, while nationwide it was only a maximum of 15 percent per year. This comes from data from the Federal Ministry of the Interior. This practice is not illegal. However, it is a tax loophole that is being used extensively.

The Bochum company Vonovia was recently able to collect shares in the previous number two in the Deutsche Wohnen sector. The majority takeover was thus successful in the third attempt.

Green finance politician Lisa Paus estimated on the occasion of a previous takeover attempt in May of this year in the Frankfurter Allgemeine []that Vonovia will avoid a tax payment in the order of one billion euros. She put the takeover at 18 billion euros and based her bill on a real estate transfer tax of 5 to 6.5 percent.

The real estate transfer tax is usually due when buying undeveloped or developed land. Depending on the federal state, this amounts to between 3.5 and 6.5 percent of the purchase price of a property – in Berlin it is 6.0 percent. In a share deal, however, real estate is bundled in one company and the buyer takes over shares in the company. Strictly speaking, it is not a matter of buying a property. Therefore the real estate transfer tax does not apply. It is enough to acquire less than 90 percent of a company to avoid paying real estate transfer tax.

Broadcast: evening show, October 26th, 2021, 7:30 p.m.


Share deal Vonovia bypasses real estate transfer tax Deutsche Wohnen

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