Effective January 1, 2025, the concurrence exemption for real estate share transactions will be changed. A 4% transfer tax will be imposed on the buyer of real estate shares upon transfer, where previously no such tax applied. Agreements between the buyer and seller that were documented in writing—specifically in a Letter of Intent (LOI)—before 3:15 PM on September 19, 2023 (Budget Day) could still fall under the current concurrence exemption. This is based on transitional law which allows parties to continue benefiting from the current favorable concurrence exemption until the end of 2029, provided that the written agreement is reported to the tax authorities by the end of March 2024.

The concurrent exemption as of 2025

In a previously published article, we provided additional background information regarding the concurrence exemption. A summary of this article is provided below:

Until January 1, 2025, the favorable concurrence exemption for the transfer of real estate shares remains in effect. The transfer of real estate shares in a real estate entity that leases new homes can be transferred without imposing sales tax and without imposing transfer tax.
Starting in 2025, the transfer of real estate shares in a real estate entity will be subject to a 4% transfer tax in cases where the property is used for less than 90% VAT-taxable activities, such as residential leasing, at the time of the share transfer or within two years following the transfer. In these situations, no VAT will be charged, but the buyer of the real estate shares will be liable for the 4% transfer tax.

Using the transitional law, the new regulation does not yet apply to agreements already made between buyer and seller.

Transitional law

To qualify under the transitional law, the following conditions must be met:

  1. Buyer and seller must have agreed in writing on the transaction before 3:15 p.m. on September 19, 2023, for example by means of an LOI (Letter of Intent);
  2. The potential buyer must have given notice of the acquisition by the end of March 2024;
  3. It must be plausible that the conclusion of the LOI is not primarily aimed at taking advantage of the transitional law;
  4. The final acquisition of the real estate shares must take place before January 1, 2030;

The burden of proof is on the tax inspector to prove that the agreement is not primarily aimed at using the transitional law. In this way, an attempt is made to prevent abuse. For example, if multiple potential buyers are named in an LOI, that is an indication of abuse.

Report the real estate share transaction to the inspector at the end of March

The buyer requests the inspector to apply the transitional law using a form. The form can be downloaded from the Tax Office website. The tax inspector then makes a decision on the request based on a decision open to appeal.

If you have any questions about the transitional law and/or the concurrence exemption, please contact the specialists at the RSM Real Estate Desk.