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Selling a hotel in Germany

Germany has the deepest buyer market of the three German speaking countries and the highest acquisition costs. Both change which route is the right one for which house.

Thomas Uhlir, MBA · Published on September 23, 2026 · Last updated on September 23, 2026

Anyone selling a hotel in Germany negotiates with a deeper buyer market than in Austria or Switzerland and at the same time reckons with higher acquisition costs: real estate transfer tax lies between the statutory rate of 3.5 percent and 6.5 percent depending on the federal state. The process takes six to twelve months and ends with the notarisation required by section 311b BGB.

What is particular about the German market is not its size but its spread. 497.5 million overnight stays a year are distributed across a country in which every federal state sets its own tax rate and in which demand in a metropolitan region, at a trade fair location and in a low mountain range is barely comparable.

A house in Munich and a house in the Sauerland therefore appear in the same statistics and in two different markets.

A record year for overnight stays, a small transaction market

The Federal Statistical Office reports 497.5 million guest overnight stays in accommodation businesses for 2025, a record figure and up 0.3 percent on 2024. Guests from Germany accounted for 413.7 million overnight stays, up 0.7 percent, and guests from abroad for 83.8 million, down 1.8 percent.

The domestic share is the figure that matters most to a buyer at this point. It stands at around 83 percent, and a market with that profile hangs less on exchange rates and long haul travel behaviour than one with a high foreign share. In return it reacts more strongly to the domestic economy, and it is precisely that sensitivity a buyer builds into his scenarios.

On the transaction side the three large houses report volumes for 2025 that have risen markedly but that differ from one another: CBRE names 1.9 billion EUR, JLL 1.84 billion EUR, Colliers around 1.66 billion EUR. The differences arise from where the boundary is drawn, not from arithmetic errors, which is why a statement resting on one of those figures holds up only if the source is named.

What the three reports have in common is the direction. The hotel investment market has picked up markedly against the previous year, and the share of hotels in the commercial investment market has risen again.

Even so, the same applies as in the Alps. At these volumes no hundreds of houses change owner in a year. For an individual property there is no market price to read off. There is a calculation of earnings and there is a list of buyers.

The spread within Germany is larger than the annual change. In the large cities international operator brands compete for locations, new build projects come to market regularly, and institutional capital is permanently present. In medium sized towns and in the regions the circle of buyers for an individual house consists of a manageable number of local addresses that know one another.

Anyone transferring a market figure from one of those two segments to the other arrives at a price nobody pays. That holds in both directions: a yield from a Frankfurt portfolio deal is as useless for a house in the Bavarian Forest as the other way round.

The second quantity a buyer in Germany examines early is the investment requirement. In houses that have run since the nineteen eighties or nineties without major refurbishment, fire safety, building services and accessibility are regularly the items on which an acquirer's projection hangs.

Real estate transfer tax is a matter for the states and moves millions

The statutory tax rate under section 11 GrEStG is 3.5 percent. Since the reform of federalism the states have been allowed to depart from it, and most of them have done so.

At the upper end of the scale sits 6.5 percent, and North Rhine Westphalia does not stand there alone. The NRW tax administration sets out its own route there, in 2011 from 3.5 to 5 percent and in 2015 to 6.5 percent, and records at the same time that the state shares this top figure with several other federal states. The gap to the statutory rate is therefore 3 percentage points.

Which rate applies in the individual case is decided solely by the state in which the property lies. The rates are also changed continually, in both directions. Before the first calculation the current rate therefore belongs requested from the competent state finance ministry and not taken from a table.

Worked example. On a purchase price of 25 million EUR, 3.5 percent is 875,000 EUR and 6.5 percent is 1,625,000 EUR. At a capitalisation rate of 6 percent the difference of 750,000 EUR corresponds to an annual result of 45,000 EUR. An amount of that size becomes visible in the price negotiation and stays visible to the end.

Two consequences follow for practice. First, the rate of the state where the property lies belongs in the first calculation on both sides, not in the last. Second, with portfolios across several states the allocation of the purchase price to the individual properties is relevant for tax and therefore relevant to the negotiation.

On top come notary and land register costs. They follow the Court and Notary Costs Act and are therefore uniform across the country and not negotiable; the GNotKG works with value based fees on the transaction value rather than with a percentage. A flat percentage figure therefore does not appear here, because it would be an estimate.

The share deal threshold is 90 percent and ten years

Germany tightened the rules on share transactions in companies holding land in 2021, and the version of section 1 GrEStG in force reflects that in four places.

Section 1 para 2a GrEStG catches the transfer of at least 90 percent of the interests in the assets of a partnership holding land to new partners within ten years, directly or indirectly. Section 1 para 2b GrEStG carries the same threshold and the same period over to changes in the shareholder base of corporations holding land.

Section 1 para 3 GrEStG catches the unification of interests, meaning the transfer or unification of at least 90 percent of the interests in the hands of the acquirer or of affiliated undertakings. Section 1 para 3a GrEStG applies where an economic participation of at least 90 percent is reached.

In practice this means that the structure formerly common, with a small residual interest left with the seller, today needs a holding period of ten years to work. It has thereby become a long term commitment that has to suit the business.

One point belongs here for completeness, because it comes up in contract negotiations. Section 24 GrEStG continues to treat partnerships with legal capacity as holding their assets jointly for the purposes of sections 5 to 7 GrEStG, limited in time from 1 January 2024 to 31 December 2026. Anyone basing a structure on that should follow the further course of the legislation with his own adviser.

Which structure fits in the individual case is not decided by tax alone. Whoever buys a company buys its past along with it; the weighing up is set out in Asset deal or share deal.

On the seller's side what counts is whether the house sits in business assets

The most frequent mistaken assumption in first conversations concerns the ten year period. It applies under section 23 para 1 no 1 EStG to private disposals of land.

A hotel run as a business, however, regularly sits in business assets. Then the gain from the disposal of the business or of a part of it is a capital gain under section 16 EStG, and the holding period changes nothing about that.

For that case the law knows two reliefs, both tied to the age of the transferor. Section 16 para 4 EStG grants an allowance of 45,000 EUR on application where the taxpayer has reached the age of 55 or is permanently unable to work; the allowance melts away by the part of the gain exceeding 136,000 EUR and is used up at around 181,000 EUR of gain. It is granted only once in a lifetime.

Section 34 EStG governs the tariff relief. Para 1 contains the one fifth rule for extraordinary income. Para 3 allows on application a reduced rate of 56 percent of the average tax rate, at least 14 percent, likewise from the completed age of 55 or in the case of permanent inability to work, limited to gains of up to five million EUR and likewise once in a lifetime.

In a family succession these two provisions are frequently the difference between a sale and a postponement. They therefore belong at the beginning of the deliberation, together with the tax adviser, and not in the week before the notary appointment.

On value added tax the normal case is the transfer of a business as a going concern. It falls outside the scope of value added tax under section 1 para 1a UStG, and the acquirer steps into the position of the transferor. Where only the land is transferred instead, the supply is exempt under section 4 no 9 letter a UStG; a waiver of the exemption under section 9 UStG is possible for supplies of land only in the contract to be notarised. The adjustment period for input tax on land is ten years under section 15a para 1 UStG.

The lease transfers, and the form requirement has changed

In leased houses the operator agreement is the actual object of purchase. Germany treats it on a change of owner under a clear rule.

Under section 566 para 1 BGB the acquirer steps into the rights and obligations under the lease in place of the landlord. Section 578 BGB declares that principle applicable to land and to rooms that are not residential rooms, meaning to commercial leases and hotel leases. Section 566 para 2 BGB leaves the transferor liable on a subsidiary basis where the acquirer breaches his obligations.

One change concerns the form. Since 1 January 2025 section 578 para 1 BGB has required only text form under section 126b BGB for leases of non residential space with a term of more than one year; the strict written form requirement of section 550 BGB applies in that form only to residential space. Breaches of the written form that arose before 1 January 2025 can since be cured by an amendment in text form.

For hotel transactions that is a noticeable relief. The written form problem in long term commercial leases was for years a standard finding of the legal review and a lever for price discounts, because a long term contract void as to form counts as concluded for an indefinite period and thereby becomes terminable on ordinary notice.

The chain is reviewed nonetheless. A lease from 2012 with four amendments, one of which exists as an agreement by email, remains a matter for the lawyer. What the remaining term of such a contract means for the price is set out in Lease, management or own operation.

The staff transfer, and they may object

Section 613a BGB governs the transfer of undertaking. Where a business or part of a business passes to another owner by legal transaction, that owner steps into the rights and obligations under the existing employment relationships.

Para 4 declares a dismissal on account of the transfer of undertaking ineffective; dismissals on other grounds remain possible. Para 5 obliges the previous employer or the acquirer to inform the employees in text form before the transfer about the date, the reason and the legal, economic and social consequences. Para 6 gives the employee the right to object to the transfer in writing within one month of receiving that information.

The one month period is the point at which something most frequently goes wrong in practice. Under the case law of the Federal Labour Court it only begins to run once the information is complete and correct. Incomplete information keeps the right of objection open, possibly well beyond completion.

For a hotel buyer this is no formal residual item. A kitchen brigade that objects as a body is an economic event. The information letter therefore belongs to the preparation of the transaction, not to its completion.

The operating structure determines which buyer calculates at all

Four structures are usual in the German market, and they produce four different investments in the same house.

Under a lease the acquirer buys a payment. Remaining term, indexation, extension options and the standing of the tenant are therefore part of the purchase price and not an annex to the purchase contract. That structure is the precondition for funds and insurers submitting an offer at all, because their investment rules require a predictable stream of payments.

Under a management agreement the operating result belongs to the owner, the bad one too. The operator provides the brand, the system and the management of the staff but does not carry the risk on the result. The buyers for that constellation are investors who understand hotel operation as a business and who can bear the swings.

A franchise is a brand and not an operating structure. It changes distribution reach and the fee burden, not the question of who runs the house and who carries the result.

Own operation, finally, is a profession. Whoever buys a house of that kind buys a job along with it, and the circle of buyers then consists of operators rather than of capital.

The operating structure works on the price through the capitalisation rate, not through the income. Anyone who mixes the two counts the same risk twice. The differences in detail are set out in Lease, management or own operation.

The process in seven steps

  1. Classification. Size, category, operating structure, contract with its remaining term, three to five years of figures and one honest sentence about the condition. The result is a range with reasons. Two to four weeks.
  2. Preparation. Adjusted figures, land register, public encumbrances, the building file, operating licences, fire safety certificates, energy certificates, contracts, staff list. Four to eight weeks.
  3. Buyer selection. A list of names, checked for financing capacity and intent before anybody learns anything.
  4. Approach. First without naming the property, then against a confidentiality agreement with documents in graduated depth.
  5. Letter of intent. Price, structure, timetable, exclusivity and the conditions on which it ends.
  6. Due diligence. Commercial, legal, tax, technical. Six to twelve weeks, longer for share deals because the company history is reviewed as well.
  7. Contract and completion. Notarisation under section 311b BGB, priority notice of conveyance, payment of the purchase price against the notice that it has fallen due, registration. Six to twelve weeks, depending on the bank and the land registry.

Two work steps run in parallel and are regularly forgotten: the information letter under section 613a para 5 BGB and the coordination with the operator, where his contract contains rights of consent or pre emption.

Off-market applies in Germany too, for a different reason

The German market is deeper than the Austrian or the Swiss one. That tempts people into assuming a broad procedure brings more here.

For large leased properties in metropolitan regions that is partly true. A structured process with several institutional bidders is a viable route there, because the number of serious addresses is large enough and because those addresses treat confidentiality as standard anyway.

For everything else the opposite holds. An owner operated house with 70 rooms in a medium sized town has a handful of local candidates and perhaps one operator group with expansion plans. That is not a deep field of bidders. For that house a public listing is the same message to staff, bank and neighbourhood as it would be in an Alpine valley. What follows from that is set out in Why the best hotels never come to market.

On top comes a German effect that sellers underestimate. The market is more transparent than the neighbouring markets, broker portals and market reports are more numerous, and a price once listed stays findable. Anyone reducing the price after nine months does so in a publicly traceable way, and every later candidate starts at the reduced figure.

The confidential route protects against exactly that mechanism. It costs reach that a seller does not need in most cases, and it preserves his control over the timing.

Three reviews that come too late in Germany

The mistakes that make a German hotel sale expensive are rarely mistakes of negotiation. They are reviews that sit too far back in the sequence.

The first concerns the classification of the property on the seller's side. In first conversations the ten year period regularly comes up, because it is familiar from private property. It applies under section 23 EStG to private assets. A hotel run as a business sits in business assets, where section 16 EStG counts and the holding period contributes nothing. At the same place it is also decided whether the allowance and the tariff relief come into question: both hang on the completed age of 55 and are each granted once in a lifetime. A sale that takes place two years too early gives both away, and nobody notices later.

The second concerns the structure. Anyone carrying over a share deal structure from before 2021 calculates with 95 percent and five years, while since the reform the law requires 90 percent and ten years. The rate of the state where the property lies belongs in the same review. Between the statutory rate of 3.5 percent and 6.5 percent there are 750,000 EUR on a purchase price of 25 million EUR, and with a portfolio across several states the allocation of the purchase price to the properties hangs on it as well.

The third concerns the staff. In practice the information letter under section 613a para 5 BGB is often put together in the week before completion out of standard blocks. If it is incomplete, the one month period under para 6 does not start to run, and the right of objection stays open. The buyer has then bought a house whose staff are not yet legally assigned to him with any certainty.

All three reviews belong in steps one and two of the sequence. There they cost hours. In step six they cost price.

Germany is the only one of the three markets with enough depth for a structured bidding procedure, and for most houses it remains the wrong route even so. Which one is right can be shown on the figures of a house, confidentially and without anybody learning of it. How we set up transactions is described under Transaction, the classification before it under Valuation and feasibility. The calculation behind it is set out in What a hotel is worth, the comparison with the neighbouring market in Selling a hotel in Austria.

Sources

This article reflects the position as at 23 September 2026. It does not replace tax or legal advice. Every individual case needs review by a tax adviser, lawyer or notary.

Frequently asked questions

How high is the real estate transfer tax on a hotel purchase in Germany?

The statutory rate under section 11 GrEStG is 3.5 percent, and the federal states may depart from it, which most of them do. In North Rhine Westphalia it is 6.5 percent after two increases in 2011 and 2015, and by its own account the state shares that top figure with several others. The applicable rate hangs on the location of the property and belongs checked with the state finance ministry before any calculation.

Which shareholding threshold triggers real estate transfer tax in a share deal?

90 percent. Section 1 para 2a GrEStG catches the transfer of at least 90 percent of the interests in a partnership holding land within ten years, and section 1 para 2b GrEStG does the same for corporations. Sections 1 para 3 and 1 para 3a GrEStG catch the unification of interests and economic participation from the same threshold.

What happens to the employment relationships on a transfer of undertaking?

Under section 613a BGB the employment relationships pass to the acquirer with all rights and obligations. A dismissal on account of the transfer is ineffective under para 4. Para 5 requires information about the date, the reason and the consequences, and para 6 gives the employee a written right of objection within one month of that information.

Is the sale of a hotel subject to value added tax?

A transfer of a business as a going concern is outside the scope of value added tax under section 1 para 1a UStG, and the acquirer steps into the position of the transferor. A pure transfer of land is exempt under section 4 no 9 letter a UStG. A waiver under section 9 UStG is possible for supplies of land only in the notarised contract, section 9 para 3 UStG.

When is a hotel sale free of income tax?

For land held in private assets section 23 para 1 no 1 EStG applies only where no more than ten years lie between acquisition and disposal. A hotel, however, usually belongs to business assets, and then section 16 EStG applies. There an allowance is available on application under section 16 para 4 EStG and a reduced tax rate under section 34 EStG.

What does the allowance under section 16 para 4 EStG give you?

On application 45,000 EUR, where the taxpayer has reached the age of 55 or is permanently unable to work. The amount melts away by the part of the capital gain exceeding 136,000 EUR and falls away entirely from around 181,000 EUR of gain. It is granted only once in a lifetime.

How does the reduced tax rate under section 34 EStG work?

Section 34 para 1 EStG provides the one fifth rule for extraordinary income. Section 34 para 3 EStG allows, on application, 56 percent of the average tax rate, at least 14 percent, where the taxpayer has reached the age of 55 or is permanently unable to work. Limited to gains of up to five million EUR, once in a lifetime.

What applies to a running lease when the property is sold?

The acquirer steps into the lease under section 566 BGB, on the principle that a sale does not break a lease. Section 578 BGB extends that to land and to rooms that are not residential rooms, so to hotel leases. Under section 566 para 2 BGB the transferor remains liable on a subsidiary basis for breaches of duty by the acquirer.

Does the written form requirement still apply to commercial leases?

Since 1 January 2025 section 578 para 1 BGB has required only text form under section 126b BGB for leases of non residential space with a term of more than one year. Breaches of the written form that arose before that date can since be cured by an amendment in text form. For residential space section 550 BGB remains unchanged.

How many overnight stays does Germany count?

For 2025 the Federal Statistical Office reports 497.5 million guest overnight stays in accommodation businesses, a record figure and up 0.3 percent on 2024. Guests from Germany accounted for 413.7 million overnight stays, up 0.7 percent, and guests from abroad for 83.8 million, down 1.8 percent. The domestic share is therefore around 83 percent.

How large was the German hotel investment market in 2025?

The three large houses name different figures because they draw the boundary differently: CBRE 1.9 billion EUR, JLL 1.84 billion EUR, Colliers around 1.66 billion EUR. All three report a marked increase on the previous year. Anyone working with one of these figures should name the source.

How long does a hotel sale in Germany take?

Six to twelve months for a prepared house, longer for share deals with a long company history. A contract for the sale of land requires notarisation under section 311b BGB. What regularly costs time is the financing, the review of the leases and the tax structuring.

What distinguishes the German circle of buyers?

It is deeper and more institutional than the Austrian or the Swiss one. Funds, insurers, developers and international operator groups are regularly active, above all in the large cities. For a house in the regions the circle is by contrast manageable and local, and the sale then runs over a list of names as it does in the Alps.

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