Germany is aiming to curb tax avoidance among real estate investors, despite pushback from companies that would face millions in new taxes triggered by stock trades.

The Federal Ministry of Finance’s draft proposal, approved July 31 by the cabinet, would make it harder for investors and companies to avoid Germany’s real estate transfer tax, which ranges from 3.5% to 6.5%. Politicians and anti-tax avoidance advocates say the bill would stop professional investors from abusing share deals to avoid taxes on land transfers.

The bill moves to the Bundestag, where lawmakers will debate it after their summer break ends in…