Acquisition Costs
A Real Estate Transfer Tax is charged at a basic rate of 3.5%, but the actual rate you need to pay varies from state to state. A 6% rate is applicable in Berlin and Frankfurt, with some states charging up to 6.5%. The Transfer Tax has to be paid around four weeks after the notary deed has been signed by both the buyer and seller of a property. Under German law, you must pay a Registration Fee of around 0.5-1.2% of the value of your property to have your name entered in the local land registry. It is also a legal requirement for sale and purchase agreements to be notarised. Notary Fees range from 0.5-2% of the purchase price.
Holding Costs
Property Tax on all German real estate assets must be paid on a quarterly basis or in full at the beginning of each year. The amount varies depending on the property’s size and location but is normally a very small amount.
Disposal Costs
If you hold a German property for more than 10 years, you can avoid paying Capital Gains Tax when you sell or dispose of it. Other exemptions may also be possible. If no exemption applies, the profit is classed as income and is taxed accordingly. Under German law, Inheritance Tax is calculated for each beneficiary individually, depending on the value of the inheritance and their relationship to the deceased. There are additional exemptions for spouses.
| Relationship to Deceased |
Inheritance Tax Rate |
| Spouse, child, grandchild, parent grandparent |
7% - 15% |
| Sibling, niece, nephew |
15% - 25% |
| Other beneficiary |
30% |
Source: Jones Lang LaSalle
