Publication City / Municipality / Region - Wohnen Transparency Register: No Transparency

A research report on anonymity in Berlin’s real estate market

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Series

Studies

Authors

Christoph Trautvetter, Markus Henn,

Published

June 2021

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Only available online

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[Translate to en:] Keine Transparenz trotz Transparenzregister

Christoph Trautvetter is an adviser on the Rosa-Luxemburg-Stiftung’s Who Owns the City? project, and a director of the German Tax Justice Network.

Markus Henn is a political scientist, and from 2010–20 was an adviser on financial markets at the NGO WEED (World Economy, Ecology & Development e. V.).

Around the world, landlords in pursuit of maximum profits are endangering the rights to housing and to affordable accommodation. Non-transparent real estate and financial markets frequently promote injustice and money laundering. To enable effective law enforcement, political regulation, the self-regulation of the market, and not least, an informed public debate about wealth and social responsibility, the Berlin real estate market needs more transparency.

Using the example of Berlin and on the basis of a selection of over 400 companies that own Berlin property, the following study demonstrates the extent of the city’s problem with anonymous real estate owners and opaque ownership structures, the forms that this anonymity takes, and why the transparency register, introduced in 2017 with the aim of ensuring more transparent ownership structures, has thus far failed to live up to its name.

Overview of the Main Findings of the Study

Anonymous companies that own
Berlin real estate
135 out of 433
No entry in the transparency register,
despite obligation to register
83 out of 111

No natural person could be identified as owner for as many as 135 of the companies included in the study, despite extensive research in the available registers. These companies thus continue to operate anonymously, in many cases violating the 2017 law. The January 2020 publication of the German register fully reveals its problems and limitations for the first time:

  • Germany is one of only four EU countries that, under certain conditions, has been waiving the obligation for companies already entered in other registers to be entered into the transparency register (a waiver known as Meldefiktion). In January 2021, the German Government presented a legislative proposal that would remove this waiver, however as of April 2021 it remains in effect.
  • Out of the 111 German companies to which, according to our analysis, this waiver does not apply and which consequently ought to register their beneficial owner in the transparency register, 82 of them had still failed to fulfil this obligation after more than two years. In only seven cases was a genuine beneficial owner entered into the register, and in 22 cases a notional beneficial owner had been listed— justifiably in some cases, spuriously in others.
  • The technical implementation of the transparency register in Germany, compared with other EU countries, is unnecessarily complicated. In Denmark, Malta, and Luxembourg, as well as in the (former EU) UK, registration takes a few mouse clicks, with no long detours or waiting times, and costs nothing.

In order to effectively combat anonymity in Berlin and around the world:

  • the Berlin state government needs to facilitate a systematic analysis of the Grundbuch (land registry) and record beneficial owners for all Berlin dwellings in the proposed housing cadastre;
  • the Federal Government and the Federal Office of Administration need to enforce the obligation to be entered into the transparency register, and improve the technical implementation and oversight of the register;
  • the European Commission and the OECD need to adjust or even abolish the reporting threshold for beneficial ownership, and/or introduce efficacious mechanisms for the registration of investment funds and publicly traded companies.

Download the Study