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Greens’ bill 21/4745 to abolish the extended real-estate trade-tax deduction: what changes if property GmbH rent is subject to Gewerbesteuer? Status September 2026
Bill 21/4745 proposes deleting §9 no.1 sentences 2–6 GewStG so property companies would pay trade tax on rents. The Finance Committee advised rejection. Here is what that would mean and what still applies as of 20 September 2026.
What is being proposed in bill 21/4745?
On 17 March 2026 the parliamentary group of Bündnis 90/Die Grünen tabled bill 21/4745, the “Act to Close a Fairness Gap in Real‑Estate Taxation.” The bill would delete §9 no. 1 sentences 2–6 of the Trade Tax Act (Gewerbesteuergesetz, GewStG). Those sentences contain the “extended real‑estate trade‑tax deduction” (erweiterte Grundstückskürzung). The draft set an effective date of 1 January 2027. The sponsors estimate municipal trade‑tax revenues would rise by at least €1.5 billion. Their rationale: companies that only hold their own real estate should no longer be privileged over other corporations that pay both corporate income tax and trade tax. The bill also notes that trade tax cannot be passed to tenants as operating costs, unlike local property tax.
Parliamentary status as of 20 September 2026
The Bundestag referred the bill to the Finance Committee on 19 March 2026. On 7 April 2026 the Finance Committee (and the associated committees) issued recommendation 21/5199 proposing to reject the bill, with votes from CDU/CSU, AfD and SPD against Greens and The Left. As of 20 September 2026 no law abolishing the extended deduction has been enacted; the current rules remain in force. For reference, the Bundestag’s press service recorded the introduction on 18 March 2026.
What the extended deduction does today
Under current law (§9 no.1 GewStG), companies get a basic reduction equal to 1.2% of the assessed property value used for local property tax. In addition, companies that exclusively manage and use their own real estate (with limited ancillary allowances) may opt for the “extended deduction,” which removes from trade‑tax base the part of income attributable to managing and using own real estate. This is the rule property holding GmbHs rely on to avoid trade tax on rental income when they remain purely asset‑managing. The Federal Ministry of Finance’s 2024 trade‑tax guidance details qualifying and harmful activities and confirms specific tolerances (e.g., income from PV or EV‑charging operations not exceeding 10% of rental income does not spoil the deduction).
What would change for a property GmbH if the bill’s deletion took effect?
If §9 no.1 sentences 2–6 were deleted, a property GmbH would no longer be able to strip rental income out of the trade‑tax base. Because corporations are deemed to carry on a trade by legal form, a property GmbH’s net rental profit would generally become subject to municipal trade tax in addition to corporate income tax. The gross trade‑tax rate equals 3.5% (the federal assessment rate) times the municipality’s multiplier (Hebesatz). Examples in 2026: Berlin 410% (effective 14.35%), Munich 490% (17.15%), Frankfurt am Main 460% (16.10%). Combined with corporate income tax and solidarity surcharge (15.825%), total headline corporate‑level rates would be roughly 30.2% (Berlin), 33.0% (Munich) and 31.9% (Frankfurt), before any add‑backs or loss offsets. Note that, unlike local property tax, trade tax is not an operating cost you can pass through to residential tenants. Commercial leases may agree wider cost pass‑throughs by contract, but trade tax is not among the standard operating‑cost items listed for residential leases.
Who is affected, and the practical risks now
- Corporate vehicles (GmbH/AG) that only hold and rent their own properties currently avoid trade tax via the extended deduction; partnerships and individuals with mere letting income are usually not subject to trade tax at all. If the deduction were abolished, the change would hit corporate property SPVs and holding structures. - Today, the real risk is to lose the deduction by engaging in non‑qualifying side activities (e.g., providing extensive services or renting third‑party property). The Finance Ministry’s guidance catalogues what is harmful and what is tolerated. A breach can trigger trade‑tax liability on the whole rental income of the GmbH for the period. - Trade tax cannot be moved onto residential tenants as operating costs; any new tax burden would have to be priced into base rents (subject to rent‑control rules) or absorbed. For commercial leases, outcomes depend on the exact wording of the service‑charge clause. - The basic 1.2% reduction linked to property values (§9 no.1 sentence 1 GewStG) would remain unless separately changed by law; bill 21/4745 targets only sentences 2–6 (the “extended” rule).
What to watch and who to ask
- As of 20 September 2026 the extended deduction still applies; the Greens’ bill has not been enacted and the Finance Committee recommended rejection. Monitor the Bundestag’s document server (Drs. 21/4745; 21/5199) for any renewed readings. - Municipal multipliers (Hebesätze) drive trade‑tax cost. Berlin’s multiplier is 410% (2026), Munich’s 490%, Frankfurt am Main’s 460%. If you model German deals with corporate SPVs, include a sensitivity case that assumes loss of the extended deduction and applies the city’s current Hebesatz. - Do not add services or business lines to a property GmbH without first checking the BMF guidance on what jeopardises the deduction. This is a genuine risk. - Always obtain advice from a German Steuerberater on entity choice, trade‑tax modelling and lease wording before you commit.
Nothing on this page is investment, tax or legal advice. Price bands are indicative asking prices and disagree between sources by design. Verify every figure with a qualified German notary, tax adviser (Steuerberater) or lawyer before committing capital.
