When you buy a condominium or other property, you have to pay real estate transfer tax. You can find out here where you have to pay land transfer tax, how much it is and when it has to be paid.
When does the real estate transfer tax have to be paid?
Once the purchase contract has been signed at the notary’s office, the notary sends a notice to the tax office. The tax office sends a notice of payment to the person agreed in the purchase contract (usually the buyer). The buyer then has one month to pay the real estate transfer tax. It does not matter whether the transfer of the property was agreed for a later date. The tax office is guided by the information provided by the notary. Once the payment has been received, it issues a clearance certificate, after which the new owner can be entered in the land register.
Where is the real estate transfer tax paid?
When two parties sign a purchase agreement in front of a notary, they undertake to pay the real estate transfer tax properly. In principle, both the seller and the buyer are obliged to do so. In most cases, however, it is stipulated in the contract that the amount is to be paid by the buyer alone. The tax assessment notice is sent by the relevant tax office. The real estate transfer tax is then forwarded to the federal state. It is the direct recipient of this tax, but is obliged to pass the money on to the municipality in which the property is located.
How high is the real estate transfer tax?
There is no general answer to the question of the amount of land transfer tax. The amount depends on the federal state in which the property is located, as well as the purchase price. At present, the amount of land transfer tax is between 3.5 and 6.5 percent of the purchase price. This refers to the price set out in the purchase contract and signed by both parties.
The following amounts currently apply for the individual federal states:
- 3.5 percent: Bavaria, Saxony
- 5 percent: Baden-Württemberg, Bremen, Lower Saxony, Rhineland-Palatinate, Saxony-Anhalt
- 5.5 percent: Hamburg
- 6 percent: Berlin, Hesse, Mecklenburg-Western Pomerania
- 6.5 percent: Brandenburg, North Rhine-Westphalia, Schleswig-Holstein, Thuringia
Can real estate transfer tax be reduced?
The real estate transfer tax is calculated according to the purchase price of a property and the federal state in which it is located. The latter cannot be influenced. Therefore, the only option is to reduce the purchase price of the property. There are several cases in which this can work.
If there are expensive fixtures and fittings in the condominium or house that do not necessarily belong to the property. For example, you can draw up two purchase contracts. The apartment is sold in one and the kitchen, garden shed, garage, sauna or swimming pool in the other. However, land transfer tax is only charged on the land and the property.
If you buy a plot of land on which a new building is to be constructed, you can also conclude two contracts. The first contract is for the purchase of the land. This price is the basis for calculating the land transfer tax. The second contract is for the construction of the new building. However, this contract does not involve any land transfer tax.
If you have any questions or uncertainties about real estate transfer tax, you can contact Vandenberg’s team of experts at any time. We look forward to advising you personally.
Please also read our other articles on this topic:
- Real estate transfer tax when buying property: Why do you pay it when buying a home?
- Property transfer tax for condominiums: Who has to pay it and how is it calculated?
