When acquiring real estate or plots of land in Germany, the so-called Grunderwerbsteuer (Real Estate Transfer Tax) is incurred. But what exactly is taxed, who has to pay it, and when? In this article, we answer the most important questions regarding Real Estate Transfer Tax – specifically with a view to the regulations in Bavaria.
Table of contents:
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Which transactions are subject to Real Estate Transfer Tax?
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What counts as property in a tax sense?
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How high is the Real Estate Transfer Tax?
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Who owes the tax?
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When does the tax become due?
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Are there tax exemptions?
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What is a clearance certificate (Unbedenklichkeitsbescheinigung)?
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What applies to contract amendments?
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What to do if the purchase contract is cancelled?
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Which Finanzamt is responsible?
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Photovoltaics & Solar: What is part of the assessment basis?
Which transactions are subject to Real Estate Transfer Tax?
It is not just the classic purchase of land that is taxed. Property exchanges, inheritances, donations with conditions, or acquisitions through foreclosure sales also fall under it. Likewise, certain corporate law transactions such as share transfers in companies owning real estate are included.
What counts as property?
The term includes land and soil, existing buildings (including those under construction), co-ownership shares (e.g., in condominiums), hereditary building rights (Erbbaurechte), and associated parts of buildings. Furnishings sold with the property (e.g., kitchen, furniture) or operating equipment (Betriebsvorrichtungen) do not belong to the assessment basis.
How high is the Real Estate Transfer Tax?
In Bavaria, the tax rate is 3.5% of the consideration – usually the purchase price. In addition, there are assumed liabilities, rights of use, or, for example, usufruct (Nießbrauch). Inventory and reserves are deductible from the purchase price portion, but must be listed separately in the contract.
Who owes the tax?
Legally, the buyer and seller are joint and several debtors, but in practice, the tax is usually borne by the buyer. The Finanzamt initially turns to the party contractually obligated.
When does the tax become due?
The tax liability arises as soon as the purchase contract is legally concluded. It becomes due one month after the notification of the tax assessment (Steuerbescheid).
Are there tax exemptions?
Yes – for example, in the case of:
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Property acquisition between relatives in a direct line
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Acquisition by spouses or registered civil partners
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Acquisition within the framework of an estate distribution (Erbauseinandersetzung)
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Donation or acquisition by reason of death
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Purchase price under 2,500 €
7. What is a clearance certificate (Unbedenklichkeitsbescheinigung)?
Without this certificate issued by the Finanzamt, the Land Registry (Grundbuchamt) may not register the buyer as the new owner. It is automatically transmitted to the officiating notary after the tax has been paid.
What applies to subsequent contract amendments?
If, for example, the purchase price is reduced within two years, the tax can be reduced accordingly upon application (§ 16 Abs. 3 GrEStG (Real Estate Transfer Tax Act)).
What to do if the purchase contract is cancelled?
If the contract is reversed and the original state is restored, the tax can be cancelled and refunded – provided this takes place within two years.
Which Finanzamt is responsible?
In Bavaria, there are specialized central offices for Real Estate Transfer Tax, depending on the region. You can find a list, for example, on the website of the Bayerisches Landesamt für Steuern.
What applies to photovoltaic and solar systems?
Whether a system counts towards the assessment basis depends on whether it is permanently assigned to the building (e.g., for self-supply) or operated commercially. The latter count as operating equipment and are exempt from tax. Roof-tile photovoltaic systems, on the other hand, count towards the consideration as they are part of the roofing.
Conclusion:
Real Estate Transfer Tax is an important component of buying property – but also a source of many questions. Those who are well-informed can not only plan better but may even save taxes in individual cases.
Do you want to know more about your options or have specific questions about your property purchase? Our team at Lexo.Tax will be happy to help you.
Note
This article serves as general information and was carefully created by the editorial team at Lexo.Tax. Personal tax advice can only be provided within the framework of a membership with Lexo.Tax – and exclusively to the extent legally permitted according to § 4 Nr. 11 StBerG (Tax Consultancy Act).