ADDITIONAL PURCHASE COSTS (ERWERBSNEBENKOSTEN / KAUFNEBENKOSTEN)

Anyone who wants to buy or build a property should not underestimate the additional costs. The purchase price is the biggest burden when buying a property.

WHAT COSTS SHOULD YOU EXPECT?

When a property is acquired, additional costs arise over and above the purchase price, known as additional purchase costs. Anyone looking to buy a property should plan for these costs in good time. They are due soon after the purchase, so they should be paid from liquid funds.

The additional purchase costs include:

• Notary costs arising from the notarisation of the purchase contract. Every purchase contract must be notarised; this is required by law. Notary fees are set by law and monitored by the state, which means they are the same at every notary. Most buyers also have to finance their property. In this case a land charge must be entered in the land register. Creating the land charge must also be notarised and this entry also incurs fees. These notary costs amount to approx. 1% to 2% of the purchase price.
• Costs for transferring ownership and entries in the land register. They amount to approx. 0.5% of the purchase price.
• Possibly an estate agent's commission. The amount can vary by region; as a rule it is between 3% and 6% plus VAT.
• Real estate transfer tax. The amount differs from state to state. It is at least 3.5% of the total purchase price, in some states even 6.5% (as of 2016). In Bavaria it is 3.5% (as of 2019). The real estate transfer tax is borne by the buyer. The basis of assessment is usually the purchase price. Furnishings in the property are not subject to real estate transfer tax. So if, for example, there is a fitted kitchen in the house and the value of this kitchen is stated in the purchase contract, the tax is reduced accordingly. All furnishings must be listed in an inventory including their respective prices.

You can find further information on the real estate transfer tax in the following article. We have compiled an overview of the tax rates for you in the table below.

REAL ESTATE TRANSFER TAX RATES OF THE FEDERAL STATES

Bavaria: 3.5% Baden-Württemberg: 5.0% Berlin 6.0% since 1.1.2014 Brandenburg 6.5% since 1.7.2015 Bremen 5.0% since 1.1.2014 Hamburg 4.5% Hesse 6.0% since 1.8.2014 Mecklenburg-Western Pomerania 6.5% Lower Saxony 5.0% since 1.1.2014 North Rhine-Westphalia 6.5% since 1.1.2015 Rhineland-Palatinate 5.0% since 2012 Saarland 6.5% since 1.1.2015 Saxony 3.5% Saxony-Anhalt 5.0% Schleswig-Holstein 6.5% since 2014 Thuringia 6.5% since 2017 As of: 21 February 2019

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