A well-functioning market requires information. Namely, those that are accessible to all market participants and also to the regulatory authorities.
A prime example is the stock market. Listed companies have to provide stacks of information, analysts dissect them, and the stock exchange regulator watches what is happening with eagle eyes.
Brazen scams on the stock market are more likely to be seen in the cinema these days than in reality. Unlike the real estate market. Concealing property ownership, rental and sale proceeds or branched participations is still child's play in Germany.
It is therefore correct that the legislator wants to remedy the situation with the second Sanctions Enforcement Act. By obliging the land registries to report all property entries to the transparency register, the market becomes fairer and thus more efficient.
In the future, investigators and authorities will be able to see more easily where real people are as responsible owners and where only anonymous companies are listed. In the next step, money laundering can be detected more quickly, sanctioned persons and goods are easier to grasp.
The well-known hedge fund manager and short seller Fraser Perring recently described the local property markets as "medieval". In fact, there is something feudal about the real estate market compared to the stock market.
If you want to evade taxes or launder money, you can easily create a chain of owner companies, branch out via part owners abroad, and then buy a property, for example, as "Berlin Real Estate GmbH".
This became an issue for Perring when he discovered that the predecessor company of the real estate group Adler Group, the ADO Group, was forging a conspicuously highly indebted group via convoluted counter-deals with Adler Real Estate and ADO Properties.
Perring has been betting on his downfall for a year. His suspicion: managers and partners have enriched themselves. Covering up real estate transactions and profits is not a petty crime.
Every normal taxpayer and home builder is well known to his tax office, every single euro is taxed when buying a private property. Making the real estate market more transparent and tracking down owners and their money flows is not just a question of fiscal revenue, but one of justice.
"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.