Real Estate Transfer Tax from 2027? Plan Family Structures Now

As of January 1, 2027, the real estate transfer tax (RETT) treatment of property transfers within family partnerships may change fundamentally. The reason is the temporary transitional rule introduced in connection with the MoPeG (Modernization of Partnership Law). If this rule expires as scheduled, many structures that are currently tax-exempt could become subject to real estate transfer tax.

Real Estate Transfer Tax: Where Genuine Exemptions Still Apply Today

In Germany, real estate transfer tax is generally triggered when ownership of real property changes or when certain shareholdings in real estate–owning entities are modified. In many federal states, this represents a significant cost factor.

However, the Real Estate Transfer Tax Act provides for exemptions that relieve typical family and life situations.

• Particularly important are the personal exemptions, which require a qualifying personal relationship between transferor and transferee — such as marriage, registered partnership, or direct lineal kinship. For this reason, a limited liability company (GmbH), for example, cannot benefit from such exemptions: a corporation cannot be married or related.
• Partnerships (e.g., civil law partnerships or limited partnerships) have traditionally been treated more flexibly in practice. Although they are regarded as independent legal entities for RETT purposes, the personal characteristics of the partners (e.g., family relationship) have generally been taken into account proportionally in otherwise taxable transactions.

Example: Contribution to a Family Limited Partnership

A father is the sole owner of a property and intends to contribute it to a family limited partnership (Family KG) as part of an anticipated succession plan. He holds 80% of the partnership, while his two children each hold 10%. In principle, the contribution is relevant for real estate transfer tax purposes because ownership of the property changes.

The acquisition is exempt to the extent of the father’s 80% interest, as he was already the property owner. The 10% interests attributable to each child are also exempt because they are related to the father in the direct line.

As a result, no real estate transfer tax arises on the contribution. Gift tax implications are intentionally not addressed here.

This system, however, may be at risk from 2027 onward.

MoPeG and Real Estate Transfer Tax: Why the “Gesamthand” Principle Matters

With the entry into force of the MoPeG (Modernization of Partnership Law) on January 1, 2024, the civil law concept of “joint ownership by the partners as a collective” (Gesamthand) was abolished. Under the new legal framework, partnership assets belong to the partnership itself, not to the partners collectively. This meant that, as with corporations, a strict separation of assets between partnerships and partners would also apply for real estate transfer tax purposes from 2024 onwards.

This creates a significant issue: If the law consistently treats the partnership as an independent legal person, personal relationships such as marriage or kinship can no longer easily be attributed to it.

However, in many cases, it was precisely this attribution that formed the basis for family-internal transactions via a partnership remaining wholly or partially exempt from real estate transfer tax.

Transitional Rule Until December 31, 2026 – Maintaining the Status Quo (for Now)

To prevent this system break from occurring immediately, Section 24 of the Real Estate Transfer Tax Act (GrEStG) was introduced. According to this section, partnerships with legal capacity (e.g., GbR, KG) are treated as joint owners for the purposes of real estate transfer tax—for a limited period of three years.

The legislator explicitly intended to preserve the previous principles for the application of exemptions to partnerships during a transitional period. At the same time, the end of this transitional provision has been incorporated:

This provision is scheduled to expire as of January 1, 2027.

RETT 2027: What Are the Concrete Risks?

If the transitional rule expires without replacement, the likely consequences include:

• Certain transfers of partnership interests between family members involving a partnership may no longer qualify for personal exemptions.
• Certain transfers of real estate from a family partnership to a family member (or vice versa) may become subject to RETT.
• Internal restructurings within family KGs or GbRs may also be affected.

In that case, only the legal position of the partnership as an independent transferee or transferor would be decisive. The family relationships of the partners would become irrelevant for RETT purposes.

Not affected to the same extent are exemptions for transactions subject to inheritance or gift tax, as those rules do not depend on the former joint ownership concept.

Therefore: Plan Real Estate Transfers Early

Many affluent families use partnerships to pool and manage real estate assets. If, in the coming years, you are considering:

• Transferring real estate from family members to a family partnership,
• Extracting property from a family partnership,
• Reorganizing ownership interests,
• Or implementing succession planning structures,

it should be assessed whether implementation before December 31, 2026 may be tax-efficient.
Experience shows that short-term measures at the end of 2026 carry considerable implementation risks.

Conclusion: Strategically Review Family Real Estate Structures Now

The transitional provision in Section 24 of the Real Estate Transfer Tax Act (GrEStG) currently still provides planning security.
From 2027 onwards, the legal situation is unclear.

For family partnerships holding real estate, this may already create a need for structured review. Early analysis enables you to:

• Quantify potential tax risks,
• Compare strategic options,
• Integrate corporate and inheritance law considerations,
• And prepare implementation steps in a timely manner.

We regularly advise on the tax, corporate, and inheritance structuring of family partnerships holding real estate. It is advisable to review at an early stage whether action is required in your specific case. Please feel free to contact us.