The total side costs on top of the purchase price are about 10-15%. This doesn’t include a company formation for example for taxation reasons. Just the pure plain property purchase as an asset deal.
6,00% Land transfer tax
1,50% Notary fees
7,14% Agents fees
14,64% of the total purchase price are buying side costs
Transaction costs by type of costs
- Land Transfer Tax (“Grunderwerbssteuer”):
a percentage of the buying price. Due about four weeks after the notary deed has been signed by buyer and seller.
Update 01. January 2007: increase to 4.5 percent.
Update 01. April 2012: increase to 5.0 percent.
Update 01. January 2014 increase to 6.0 percent (still valid as of 15.08.2017).
Link to berlin.de in German for more details about the land transfer tax.
- Notary fees
1.2 – 1.5 percent of the buying price, plus any fees for a needed translation of the deed, if the buyer is not able to understand German. We recommend to check especially the translation fees in advance, as they can vary strongly. We have seen differences from 300 EUR to 3000 EUR for the same type of work. We recommend written translation, but you can have a simultaneous translator with you. Alternatively you can give POA power of attorney to someone and before or later testify that the attorney acted with your approval. Don’t act under pressure or in a hurry, don’t sign anything that you have not fully understood. If you give POA, give it to a trustworthy person, typically somebody that is not beneficiary involved
- Broker fees / Agent Commission
up to 7,14 percent of the purchase price. Typically there are one or more brokers/estate agents involved. The fee is limited by law to 6% plus VAT (current VAT is 19%). The commission in Germany varies from federal country to federal country slightly. In most federal countries it is 6% plus the VAT. Sometimes splited between buyer and seller, in Berlin typically covered fully by the buyer.
- Notary fees for the Mortgage
If financing is involved, there might also be fees from the bank for the mortgage, plus any additional notary and registration fees to register the mortgage in the land register. Any mortgage needs to be secured in the land registry (Grundbuch) and that can only be done by a German notary, typically but not necessarily the same notary of the purchase contract.
- Clearance Certificate
Fees for the clearance certificate from the municipality for the right of first refusal (“Negativbescheinigung für das Vorkaufsrecht der Gemeinde”).
The clearance certification testifies that the municipality checked and rejected his right of first refusal. This fee is a one-time fee of ca. 100 Euro in Berlin.
Keywords: cost, registration, tax, vat,