How does the real estate transfer tax affect the purchase of a property?
July 9, 2022 | 50,00 EUR | answered by Mia Pilz
Dear tax advisor,
I am facing the decision to purchase a property and have some questions regarding real estate transfer tax. I hope you can help me with this.
So far, I have been thoroughly researching the buying process and am confident that I have found the right property. However, I am concerned about the real estate transfer tax, as I am not exactly sure how it affects the purchase price and what costs are involved.
My worry is that the real estate transfer tax could significantly increase the total price of the property and leave me financially overwhelmed. Therefore, I would like to understand how the real estate transfer tax is calculated and if there are ways to reduce or avoid these costs.
Could you please explain to me how the real estate transfer tax impacts the purchase of a property? Are there specific factors that influence the amount of tax? And are there legal ways to minimize the real estate transfer tax?
I would greatly appreciate your support and expertise on this matter.
Sincerely,
Jan Voss
Dear Mr. Voss,
Thank you for your inquiry regarding real estate transfer tax in relation to the purchase of a property. I understand your concerns and will do my best to assist you with your questions.
The real estate transfer tax is a tax that applies when purchasing land or rights similar to land. In Germany, it is levied by the federal states and is based on the respective state law. The real estate transfer tax is usually between 3.5% and 6.5% of the purchase price of the property. This percentage varies depending on the federal state.
The real estate transfer tax is calculated on the purchase price of the property, so on the actual amount you pay for the property. It is calculated separately from other costs such as notary and real estate agent fees. It is important to note that the real estate transfer tax must be paid in addition to the purchase price and can therefore increase the total costs of the property purchase.
There are certain factors that can influence the amount of real estate transfer tax. These include the value of the property, the purchase price, the intended use of the property (such as whether it is a self-used property or a rental property), and whether it is a new construction or an existing building. Any additional considerations such as furniture or fixtures can also affect the real estate transfer tax.
There are various legal ways to minimize or avoid real estate transfer tax. One option is to use exemptions, which vary in amount depending on the federal state. There is also the option to acquire properties through a gift, which may result in no real estate transfer tax under certain circumstances. However, it is important to consult with a tax advisor or notary beforehand to ensure that all legal aspects are considered.
I hope this information is helpful to you and that you now have a better understanding of real estate transfer tax. If you have any further questions or would like more detailed advice, I am happy to assist.
Best regards,
Mia Pilz, Tax Advisor
