How does the real estate transfer tax affect the purchase price of a property?
September 9, 2023 | 50,00 EUR | answered by Otto Dornbusch
Dear Sir or Madam,
My name is Fanni Bacigalupo and I am about to purchase my first property. In my research on real estate transfer tax, I have come across many different pieces of information and am now feeling a bit uncertain.
My current situation is as follows: I have found a suitable property and would like to buy it. The purchase price is 300,000 euros. I have heard that on top of the purchase price, real estate transfer tax is levied. However, I am not clear on how this tax will affect the actual purchase price and how much it will be in my case.
My concerns mainly lie in wanting to realistically estimate the actual financial cost of acquiring the property. I do not want to experience any unpleasant surprises and later realize that I have not budgeted enough money for the real estate transfer tax.
Therefore, my question is: How does the real estate transfer tax specifically affect the purchase price of my property? Are there ways to reduce or avoid this tax? And how much is the real estate transfer tax likely to be in my specific case?
I look forward to your expert advice and thank you in advance for your support.
Best regards,
Fanni Bacigalupo
Dear Mrs. Bacigalupo,
Thank you for your inquiry regarding real estate transfer tax in relation to the purchase of your first property. It is understandable that you are concerned about the financial implications of this tax and want to ensure that you can realistically estimate all costs.
Real estate transfer tax is a tax that is incurred when purchasing land or property and is levied by the federal states in Germany. The amount of real estate transfer tax varies depending on the state and is usually between 3.5% and 6.5% of the purchase price. In your case, with a purchase price of 300,000 euros, the real estate transfer tax would therefore be between 10,500 euros and 19,500 euros.
Real estate transfer tax is calculated based on the actual purchase price of the property. This means that you need to increase the purchase price of 300,000 euros by the amount of the real estate transfer tax to determine the total amount you need to pay for the acquisition of the property. So it is important to consider this amount in your financial planning.
However, there are some ways to reduce or partially bypass the real estate transfer tax. For example, when purchasing a property under certain conditions, you may be eligible for discounts or exemptions from the real estate transfer tax. This could include cases of acquisition within the family such as gifts or inheritances, which are tax-favored. However, it is important to inform yourself thoroughly and seek legal advice if necessary.
Overall, it is advisable to thoroughly inform yourself about real estate transfer tax before purchasing a property and, if necessary, seek professional advice to consider all financial aspects of the purchase and avoid unpleasant surprises.
I hope that this information has been helpful to you and I am available to answer any further questions.
Best regards,
Otto Dornbusch
