New arguments for restructuring with real estate relevance
The European Court of Justice ruled on 4th June 2026 in the case of Nova Iberomoldes (C-837/24) that Portugal was not permitted to levy IMT (comparable to the Austrian real estate transfer tax) on the contribution in kind of shares in a property-owning company. This ruling is particularly relevant for Austrian companies because the Portuguese legal situation is comparable to the Austrian one in key aspects.
This brings a question into sharper focus, which is of great importance in practice: Is the Austrian real estate transfer tax in certain internal group restructurings compatible with Property reference Is it legally tenable under EU law?
The case in brief
In the underlying case, a holding company was established in Portugal. The capital of this company was raised through contributions in kind. Among the assets contributed were majority shareholdings in several limited liability companies. One of these companies held two properties in Portugal.
Under Portuguese law, the acquisition of shares in a company that owns property may be treated for the purposes of property transfer tax as a direct acquisition of property if, as a result, a shareholder holds at least 75 % of the shares. Although the properties themselves were not transferred, the Portuguese tax authorities imposed property transfer tax.
Why the ECJ rejected the property transfer tax
The ECJ qualified the transaction as a restructuring within the scope of the Capital Accumulation Directive, i.e. Directive 2008/7/EC concerning indirect taxes on the raising of capital. This directive aims to prevent capital formation within the European Union from being hampered by indirect taxes. The decision particularly focused on Articles 4 and 5 of Directive 2008/7/EC.
According to the ECJ, this was a restructuring protected by the directive, which generally could not be subject to indirect taxation. The exceptions provided for in the directive also did not apply in this specific case. It was particularly relevant that, although shares in a company were contributed, the properties legally remained with the same company. Thus, there was no change in ownership of the properties themselves. Likewise, the taxation could not be justified solely on the grounds of preventing tax evasion or avoidance.
What significance the ruling could have for Austria
Even in Austria, property transfer tax can arise not only from the direct acquisition of a property, but also, under certain conditions, from the pooling of shares and changes of shareholders in property-owning companies. Of particular relevance here are the regulations in § 1 paragraph 3 of the Property Transfer Tax Act (GrEStG). Especially in the case of restructurings within a corporate group, this repeatedly leads to burdens in practice, even though the real estate economically remains within the corporate group.
It is precisely on this point that the ECJ ruling is particularly exciting for Austria. If a process is protected by the Capital Accumulation Directive, taxation according to Austrian rules could be questionable under EU law.
According to the professional contributions available, this particularly concerns restructurings of shares in property-owning corporations, e.g.:
- Contributions of capital shares into other capital companies
- Group-internal downstream and side-stream structures
- Capital share splits
Furthermore, much suggests that this assessment should not necessarily depend on whether the transaction takes place with or without a capital increase, or whether direct or indirect shareholding structures are involved. However, the decisive factor is always whether the specific transaction falls within the scope of the Capital Accumulation Directive.
What companies should check regarding property transfer tax now
This means Austrian companies have a pressing need for review. This applies both to structures that have already been implemented and to planned reorganisations.
For completed transactions It should first be checked whether the respective factual situation falls within the scope of the Capital Accumulation Directive. If the real estate transfer tax has already been assessed by decree, it may be possible to assess whether an appeal is feasible.
Was the tax self-assessed and remitted, An application for a formal assessment under Section 201 of the BAO can be made within one year. This keeps the legal avenues open. Subsequently, a complaint against the assessment can be lodged if necessary.
Also for future restructuring A thorough tax audit is recommended before proceeding. Depending on the case, it may be advisable not to proceed with a voluntary disclosure prematurely, but rather to disclose the question of EU law to the tax authorities. In the expert articles, a declaration to the tax authorities with appropriate disclosure is also mentioned as a possible course of action in this context.
Conclusion: ECJ ruling with possible signal effect for Austria
The ruling brings new momentum to a tax-sensitive area that is highly relevant for corporate groups, holding structures, and corporate reorganisations in Austria. Whether and to what extent this will lead to changes in Austrian tax practice remains to be seen.
However, it is already apparent that those who are planning or have recently implemented restructurings involving property-owning limited liability companies should re-evaluate the real estate transfer tax implications. We would be happy to assist you in assessing the impact on your specific case and carefully preparing the next steps.
Created: 15.07.2026
Source: Publications Office of the European Union
Photo: Pavel Danilyuk
