The Berlin government’s envisaged five-year rent cap on residential properties has caused significant uncertainty among investors in housing portfolios. By Constanze Kugler and Christian Thiele On 18 June 2019, the Berlin Senate published a position paper specifying details of an envisaged five-year rent cap on residential properties in the German capital. The cap would significantly … Continue Reading
Federal Ministry of Finance publishes draft tax bill outlining new measures effective 1 January 2020. By Tobias Klass The Federal Ministry of Finance has released its first draft tax bill on the contemplated real estate transfer tax (RETT) reform, setting out the general framework to which market participants must conform. German political debate has focused … Continue Reading
While a shareholders’ resolution is still required, the FCJ left open the question of whether notarization of the resolution is necessary. By Christian Thiele and Otto von Gruben The German Federal Court of Justice (FCJ) decided on 8 January 2019 that Section 179a (1) of the German Stock Corporation Act (AktG) does not apply mutatis … Continue Reading
Sellers may be liable for damages if actual rent is lower than stated in the rent roll, despite contractual exclusion of liability for defects. By Christian Thiele and Patrick Braasch The Higher Regional Court of Cologne (HRC Cologne) has ruled that a property seller is liable for the difference between the rent shown in the … Continue Reading
Ruling finds that parties may make informal modifications without notarization after the conveyance has become binding. By Christian Thiele The German Federal Court recently ruled that parties may informally modify a property purchase agreement if the conveyance has become binding — thereby confirming prior case law. The Court further held that the parties may also … Continue Reading
Proposed reforms to the Mietpreisbremse aim at strengthening and solidifying restrictions on steep rent increases in German urban areas. By Christian Thiele and Eun-Kyung Lee After intense discussions within the ruling coalition, the German government this week adopted a draft bill regarding the reform of German tenancy law. What is the Mietpreisbremse? The Mietpreisbremse (literally … Continue Reading
Real estate investors with their corporate seat and management outside of Germany may be subject to German taxation on capital gains from share deals. Non-resident individuals (investing directly or through partnerships or funds) will primarily be affected. By Tobias Klass and Verena Seevers According to a German draft tax bill, the sale of shares by … Continue Reading
FCJ decision finds that mere suspicion of contamination resulting from a sold property’s past use constitutes a defect. By Patrick Braasch and Christian Thiele The German Federal Court of Justice (FCJ) has ruled that an abstract suspicion of contamination resulting from a sold property’s past use already constitutes a material defect — irrespective of the … Continue Reading
The Conference of the German Ministers of Finance has announced measures against so-called share deal structures following the conclusion of the respective technical federal-state working group. By Tobias Klass Background So-called share deal structures have been the focus of German political debate about real estate transfer tax (RETT) for some time. The coalition agreement already … Continue Reading
Increased competition among insurers and improved policy terms suggest the German W&I insurance market is becoming more favourable to investors. By Christian Thiele In real estate transactions, buyers and sellers naturally pursue conflicting interests when negotiating a sale and purchase agreement. On the one hand, sellers will strive to achieve the highest possible purchase price, … Continue Reading
Cross-border migration of German real estate companies is generally possible, however its admissibility must be determined on a case-by-case basis. By Christian Thiele International real estate investors continue to favour German real estate, however, the same does not always apply to German real estate companies. International real estate investors, for instance, often find German capital … Continue Reading
By Karl Mah and Sean Finn Against a stormy backdrop of government instability and Brexit uncertainty, the 2017 Budget was always unlikely to rock the boat. The Chancellor chose not to launch a sweeping attack on “tax avoiders” in light of the public outrage over the Paradise Papers, instead targeting announcements in this area at specific perceived abuses. … Continue Reading
