On top of the purchase price come 8 to 13 percent of closing costs depending on the federal state, which no bank finances. What transfer tax, notary, land registry and agent cost and where you can save.
In short
- Real estate transfer tax 3.5 percent in Bavaria up to 6.5 percent in NRW, Brandenburg, Schleswig-Holstein, Saarland, Thuringia.
- Notary and land registry around 1.5 to 2 percent, set by law.
- Agent up to 3.57 percent per side; since 2020 buyer and seller split the commission.
- Excluding movable items such as kitchen and sauna from the price saves transfer tax.
Real estate transfer tax
The transfer tax (Grunderwerbsteuer) is the biggest item and set by each federal state. Bavaria charges 3.5 percent, Hamburg 5.5, Baden-Württemberg, Bremen, Lower Saxony, Rhineland-Palatinate, Saxony-Anhalt and Thuringia 5.0, Saxony 5.5, Berlin, Hesse and Mecklenburg-Western Pomerania 6.0, Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein 6.5 percent. At €400,000 that is between €14,000 and €26,000. It falls due after notarisation, and only after payment does the tax office issue the clearance certificate without which no land registry entry happens.
Notary and land registry
The notary certifies the purchase contract and the land charge for the bank. The fees follow the Court and Notary Costs Act and come to around one percent of the price; the land registry charges another 0.5 percent for the transfer of ownership and registration of the land charge. Negotiating is not possible, but the land charge should not be registered higher than necessary.
Agent
Since December 2020 buyers of flats and single-family houses may bear at most half the commission. Common is 3.57 percent including VAT per side, less in some regions. Buying directly from the owner removes the item entirely. Commissions are negotiable, especially in markets with long marketing times.
Further items
Surveyor for the valuation €500 to €1,500, bank processing mostly abolished, commitment interest with long waits until drawdown, moving, renovation, kitchen. For the financing there is the land charge registration, included in the notary item. Whoever builds new pays development, surveying and building permit.
Saving on transfer tax
Movable items such as fitted kitchen, sauna, awnings and garden shed are not property. Whoever lists them separately in the contract at a realistic value pays no transfer tax on them. On €15,000 of fittings in NRW that is €975. The tax office accepts up to about 15 percent of the price without query if the values are plausible. For new builds a separate land and construction contract can limit the tax to the land price, provided there is no single contractual package.
What this means for the financing
Banks finance closing costs only with a surcharge or not at all. They must be available as equity. In NRW around €48,000 of closing costs are due at €400,000, in Bavaria around €36,000. Whoever co-finances the closing costs pays a higher rate and starts with a loan above the value of the property.
Frequently asked questions
When is the transfer tax due?
About four to six weeks after notarisation, with a payment deadline of one month after the notice.
Can I deduct closing costs for tax?
Not for owner-occupation. For letting they belong to acquisition costs and are depreciated; land charge costs immediately as expenses.
Does the seller pay closing costs too?
Their half of the agent’s commission, the deletion of old land charges and possibly a prepayment penalty to their bank.
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