Calculate Transfer Tax for Germany
Want to get into Real Estate Investing but don't know how and where to start?
1. How is the transfer tax calculated?
Please enter a number for the calculation basis, which usually is the buying price. Then choose the German federal state in which the property is located.
The basis of calculation represents the value, which the buyer has to pay in order to purchase the property.
2. Can you set off the transfer tax against tax liability?
In many jurisdictions the transfer tax can be set off against tax liabilities. Especially in Germany if the property is rented or is utilized commercially by the owner. It can't be set off however, if the property is used as private home by yourself or someone closely related to you.
If the property is rented, then, in Germany, they have to be reported under the section "income from rent and lease" (Einnahmen aus Vermietung und Verpachtung, Anlage V) in the annual tax declaration. The transfer tax is part of the acquisition costs when buying a property and is added to the purchase price. This total amount can be depreciated over the years and the annual tax-deductible amount is set off as expenses.
If the property is used commercially by the owner, then, in Germany, the acquisition costs can be depreciated over the years as operating expenses depending on the underlying accounting standards.
In the case where only some part of the property is rented the acquisition costs can be deducted proportional to the ground area involved.
3. Are there cases where there is no transfer tax?
- Property purchasing prices below 2500 Euro are exempt from transfer tax §3 Abs. 1 Grunderwerbsteuergesetz
- The sale of the property is between (tax-legal) spouses.
- The sale of the property is between close relatives, e.g. parents or grandparents and children and grandchildren. (Definition of close relatives in the same line.)
- The property is a gift from one spouse to another.
- The property is a gift from one close relative to another.
- The transfer of the property due to inheritance.
- The liquidation of a trust relationship, where the buy-back of the property is executed by the trustor.
4. What is the tax clearance certificate?
5. More information?
What are the transfer tax rates in Germany?
|Mecklenburg-Western Pomerania||6 %|
|Lower Saxony||5 %|
|North Rhine-Westphalia||6.5 %|
|Last updated 02.2021|