Property Transfer Tax (Grunderwerbsteuer)
One-time tax when buying property in Germany
Grunderwerbsteuer (property transfer tax) is a one-time state tax paid when purchasing real estate in Germany. It's one of the largest upfront costs after your down payment.
Tax Rates by State (Bundesland)
Real Cost Example
€450,000 property in Berlin (5.0% rate):
- Purchase price:€450,000
- Transfer tax due:€22,500
This is due within 4-6 weeks of notary appointment and must be paid before ownership transfers.
Key Facts
- Based on purchase price: Calculated on the full property price (not just building value)
- Not tax-deductible: Unlike mortgage interest, transfer tax cannot be deducted from rental income
- Due before registration: Must be paid before property is registered in your name
- Buyer always pays: By law, transfer tax is always the buyer's responsibility
Strategic Consideration
Location matters! A €450k property in Bavaria costs €15,750 in transfer tax, while the same property in NRW costs €29,250—a difference of €13,500. Consider this when comparing markets.
Related Terms
Closing Costs(Nebenkosten / Kaufnebenkosten)
Closing costs (Kaufnebenkosten) include property transfer tax, notary fees, and land registry fees. In Germany, expect 10-15% of purchase price in total closing costs.
Notary Fees(Notarkosten)
Notarkosten are mandatory fees paid to a notary (Notar) for authenticating property purchases in Germany. Typically 1.5-2% of purchase price, covering contract preparation and land registry updates.
Purchase Price(Kaufpreis)
The purchase price (Kaufpreis) is the agreed price for the property. This amount is split between building value (depreciable) and land value (not depreciable) for tax purposes.