How can I minimize the real estate transfer tax?
March 27, 2023 | 50,00 EUR | answered by Tina Ullmann
Dear tax advisor,
I am about to acquire a property and would like to know how I can minimize the real estate transfer tax. The background is that I have long wanted to fulfill my dream of owning a home and have finally found the perfect property. However, I am concerned about the amount of the real estate transfer tax, as it constitutes a significant part of the purchase costs.
The current situation is as follows: The purchase price for the property is 300,000 euros. According to calculations, the real estate transfer tax in my state is 6.5%, which amounts to 19,500 euros. This is a considerable sum for me as the buyer, which I would like to minimize in order to reduce my financial burden.
My concern is that the real estate transfer tax will take up a large portion of my budget for the home purchase, leaving me with less financial flexibility for potential renovations or other expenses. Therefore, I am looking for solutions to minimize the real estate transfer tax and improve my financial situation.
My specific question to you is: What legal strategies are available to minimize the real estate transfer tax when purchasing a property? Are there opportunities to take advantage of tax benefits or create incentives to reduce the tax burden? I would appreciate your expertise and recommendations on how to keep the real estate transfer tax as low as possible.
Thank you in advance for your support.
Sincerely,
Maria Wittik
Dear Mrs. Wittik,
Thank you for your inquiry regarding real estate transfer tax when buying a property. I am pleased that you are fulfilling the dream of owning your own home, and I am happy to assist you in minimizing your financial burden.
Real estate transfer tax is indeed a significant amount that is due when purchasing a property. However, there are some legal strategies to reduce this tax burden. Below, I will show you various ways to reduce real estate transfer tax when buying a property:
1. Acquisition of partial plots: If possible, you may consider dividing the property into several partial plots and acquiring them separately. This can reduce the basis for calculating real estate transfer tax, as the tax rate is calculated per partial plot.
2. Contribution of own work: If you want to carry out certain renovation or expansion works yourself, these own contributions can be credited as compensation for the acquisition of the property. This can reduce the purchase price and therefore also the real estate transfer tax.
3. Use of tax benefits: Depending on the federal state, there are different regulations and exceptions that allow a reduction of real estate transfer tax. For example, you could check if you can benefit from tax advantages as a first-time property buyer or for certain renovation measures.
4. Second home or holiday home: If the property is intended to be used as a second home or holiday home, you may be able to benefit from tax advantages. Some federal states have specific regulations that reduce real estate transfer tax for this purpose.
5. Consultation with a tax advisor: Finally, I recommend that you seek individual advice from a tax advisor specializing in real estate taxation. An expert can provide you with tailored solutions and recommendations to minimize real estate transfer tax as much as possible.
I hope this information is helpful to you and that you can successfully minimize real estate transfer tax when purchasing your property. If you have any further questions or wish for individual advice, I am happy to assist you.
Best regards,
Tina Ullmann
Tax advisor
