The Budget Accompanying Act 2025 aims to amend numerous Austrian tax laws, including the Real Estate Transfer Tax Act (GrEStG): In particular, real estate transactions through share deals are to be taxed at a significantly higher rate in the future. Companies must be prepared for significant additional burdens and severely restricted room for maneuver. The changes are scheduled to take effect on July 1, 2025.

The aim of the amendment is to prevent tax avoidance structures with respect to real estate transfer tax (GrESt) and to achieve equal taxation of share deals and asset deals. In the future, anyone acquiring shares in so-called real estate companies will have to pay 3.5% real estate transfer tax instead of the current 0.5%.

Focus on real estate companies

The term "real estate company" is defined by law for the first time: It includes companies whose activities are focused on the sale, management or rental of real estate. In particular, this includes special purpose vehicles (SPVs) that develop and sell real estate. In the future, if at least 75% of a real estate company (directly or indirectly) is merged or reorganized under one ownership, a real estate transfer tax of 3.5% of the fair market value of the property will apply - instead of the current 0.5% of the property value. In the future, the basis of assessment will be the fair market value in accordance with the Valuation Act.

Reduction of the participation threshold to 75% and explicit inclusion of associations of persons

The current threshold for taxable share combinations will be reduced from 95% to 75%. At the same time, the observation period is extended from 5 to 7 years.

Also new is the explicit inclusion of associations of persons: In the future, an association of shares will also be deemed to exist if shares are held by a person or an association of persons. Constellations in which partnerships or corporations are under uniform management or a controlling influence is exercised by a natural person or legal entity - for example, through shareholdings or other economic control - are deemed to be an association of persons. This significantly expands the scope of taxable acquisitions. Mergers of shares in corporations are now included from this 75% threshold, i.e. the offense will apply equally to partnerships and corporations. Indirect transfers of shares are also included by multiplying the shareholding ratios along the shareholding chain. Listed companies are excluded due to lack of traceability.

The lowering of the threshold for relevant share transfers from 95 % to 75 % and the extension to indirect shareholdings is explicitly aimed at so-called GrESt blocker structures. These are structures in which small shareholdings (around 6% or 5.1%) are deliberately held by third parties in order to avoid a taxable consolidation of shares. The new 75% threshold and the inclusion of indirect shareholdings will effectively prevent this practice. These models will therefore lose their effectiveness in the future - especially if they are structured within a group but outside a tax group pursuant to Section 9 KStG. For market participants, the regulation means an increased auditing and documentation effort.

No group clause

Unlike before, intra-group reorganizations are not exempt from RETT. This means that in the future, intra-group share transfers may be subject to RETT if the thresholds are exceeded. This will result in a significant additional tax burden for groups.

​​​​​​​Valuation and basis of assessment

In practice, the change from the previous tax base - the so-called land value according to the Land Value Ordinance - to the market value according to the Valuation Act often means a significant increase in the tax base. The fair market value is based on the market value of the property and can be significantly higher than the standardized property value for high-priced properties, especially in urban areas. As a result, real estate companies are taxed at a significantly higher level, which is particularly important for project development and the sale of real estate portfolios.​​​​​​​

​​​​​​​Real estate related audit for share consolidation

In the future, a property-by-property approach will be used to determine whether there is a taxable unity of interests. This means that the 75% threshold must be assessed separately for each property.​​​​​​​

​​​​​​​Special rules for family members

Favorable treatment is provided if only persons within the meaning of the family circle pursuant to § 26a para. 1 no. 1 GGG are involved in the merger or reorganization. In these cases, the real estate transfer tax will continue to be levied at the rate of 0.5% of the value of the property, even if a real estate company is involved.

Effective July 1, 2025

The new rules will come into force on July 1, 2025. Crucially, the tax liability will arise after that date. Companies planning real estate transactions or corporate reorganizations should therefore review them in good time - and, if necessary, implement them before they come into force.

It is important to note that anyone holding more than 75% of the shares of a real estate company on June 30, 2025 will not be subject to the tax. However, if the percentage shareholding is changed after this date - without falling below the 75% threshold - this may trigger a real estate transfer tax liability in the future.

Impact of Regulatory Changes and Need for Action

Share deals, which have so far been used as a structuring tool to reduce real estate transfer tax, will become less attractive as a result of the planned equalization with asset deals. Structuring models in which ownership thresholds of less than 95% have been deliberately maintained in order to avoid triggering a tax liability will have little effect in the future. This applies, for example, to fund structures, corporate groups and institutional investors who often invest in several stages or via chains of shareholdings.

Companies, especially​​​​​​​ those with real estate related business models, should therefore review existing shareholding structures and strategically prepare future transactions in light of the new tax framework. In particular, it is important to ensure that shareholding amounts, indirect shareholdings and time periods are accurately documented to avoid tax risks. In this context, it is important to seek tax and legal advice at an early stage.