CJEU on Real Estate Transfer Tax

In a judgment issued in June 2026, the Court of Justice of the European Union (CJEU) ruled that, under certain conditions, the levying of Portuguese real estate transfer tax on a contribution in kind of shares in companies owning real estate to a corporation may be contrary to the Capital Duty Directive (Kapitalansammlungsrichtlinie, KA-RL). As the Austrian Real Estate Transfer Tax Act (Grunderwerbsteuergesetz, GrEStG) contains provisions comparable to those under Portuguese law, the Austrian Federal Ministry of Finance (Bundesministerium für Finanzen, BMF) has published guidance on this matter.

Implications for Austrian Real Estate Transfer Tax

According to the BMF, the following transactions, which trigger an acquisition for real estate transfer tax purposes at the level of the corporation acquiring the equity interest, either through a change of shareholders or a consolidation of shares, may be regarded as restructuring operations, provided that shares in the acquiring corporation are granted in each case:

• a straightforward contribution of an equity interest in a company owning real estate outside the scope of the Austrian Reorganisation Tax Act (Umgründungssteuergesetz);
• a downstream or side-stream contribution or demerger of an equity interest in a company owning real estate, or of a business or part of a business holding an equity interest in a company owning real estate;
• a side-stream merger where the assets of the transferring company include an equity interest in a company owning real estate;
• corresponding “diagonal” transactions, for example, the contribution or demerger of an equity interest in a company owning real estate within a group between different ownership chains and at different levels, such as between aunt and niece companies.

It makes no difference whether new shares are issued or whether consideration is provided in the form of existing shares held by the previous shareholders. Likewise, the applicability of the Austrian Reorganisation Tax Act is irrelevant for the purposes of applying the Capital Duty Directive.

Timely and Comprehensive Tax Advice

Where a transaction clearly qualifies as a “restructuring operation” falling within the scope of the Capital Duty Directive in accordance with CJEU case law, the Austrian tax authorities must assume that no real estate transfer tax liability arises. Accordingly, where the above requirements are clearly met, neither a self-assessment nor the filing of a tax return for the transaction is required.

However, as the legal position does not yet appear to have been sufficiently clarified for transactions and types of companies other than those referred to above, real estate transfer tax should continue to be paid in such cases. Alternatively, timely and comprehensive tax advice should be sought.