Real estate purchase – cost and income tax

In addition to the purchase price to be paid, other significant “incidental costs” also arise from the purchase of residential property.

The following costs and purchase tax are payable by property owners:

1.Notary Fees
2.Real estate transfer tax
3.Land Registry
4.Broker Commission

1.Notary fees
Real estate purchase contracts are subject to notarial certification.
In the absence of a notarial deed, the purchase contract is simply void (§§ 125, 311b BGB) unless the execution of the legal transaction results in the cancellation and registration of the change of ownership in the land register for the cure of the form deficiency (§ 311b para Sentence 2 BGB).

This is because the notary certifies the following legal transactions:

-Purchase contract,
-Land charge

Furthermore, he is authorized to do so; the business to register in the land register. As a rule, its fees amount to about 1.0 to 1.5% of the purchase price.

2.Real estate transfer tax
The acquisition of landed property represents a business subject to a taxable income tax. An exception to this is the following:

When selling to the spouse,
For dismissals and
When selling a property to descendants and ancestors in the first place.

If a property is sold from grandparents to grandchildren or vice versa, this sale is exempt from the basic income tax.

The basic income tax is usually about 5% of the purchase price. However, it is determined by the state. In Hamburg, for example, land purchase taxes of about 4.5% of the real estate purchase price are due – in Schleswig-Holstein, on the other hand, a stately 6.5%.

3.Land Registry
The registry court, which is responsible for keeping the land register, which in turn is responsible for registration applications and deletions in the land register, charges approximately 0.3% of the sale price.

4.Broker commission
The property purchase is regularly mediated by a specialist real estate broker.
The mediation commission of the broker is about 5.95% to 7.14% of the purchase price.

Since the brokerage fees are not a legally fixed tariff, in any case the commission of a broker should negotiate the amount of the brokerage fee.

No broker likes to miss a business. You should use this for the free negotiation of the amount of brokerage commissions!