Home generalPurchase costs at a glance when buying land, house and apartment

Purchase costs at a glance when buying land, house and apartment

general : Purchase costs at a glance when buying land, house and apartment

content

  • cost structure
    • Real estate transfer tax
      • tax rates
    • brokerage costs
    • notary fees
    • Legal Description
  • Additional purchase costs
    • modernization costs
    • development costs
    • Subsequent costs
  • Tips for quick readers

The dream of owning a home is a wish many Germans have. In most cases, financing is the biggest hurdle. There are several reasons for this. For one thing, banks expect that at least 20 percent of the real estate price will have to be financed from equity. On the other hand, the purchase costs are a, often not calculated, high sum dar. If you want to have all the costs for home, land or apartment purchase in view, then you will learn in this post, all about purchase costs.

cost structure

Any additional costs added to the property purchase price are referred to as incidental purchase costs. These include the brokerage costs, the notary and court fees as well as the real estate transfer tax . Banks do not finance these acquisition-related costs. These costs have to be financed from your own pocket. The ancillary purchase costs vary considerably from one federal state to another and can therefore account for between 10 and 15 percent of the real estate purchase price . In particular, the land transfer tax and the brokerage costs vary considerably from region to region.

In order to keep a rough overview, we have created a table for you in which the purchase costs of the individual federal states are listed. Keep in mind, however, that this table is only intended to give you an overview. The prices are therefore not fixed and subject to normal market fluctuations. For the overview, 1.5 percent of the notary costs and the land register entry were estimated.

Table - Cost structure with brokerage fees

stateSum of the purchase costs
Baden-Wurttemberg10.07% - 11.26%
Bavaria8.57% - 9.76%
Berlin13.45% - 14.64%
Brandenburg15.14%
Bremen10.07% - 12.45%
Hamburg12.25%
Hesse11.07% - 13.45%
Mecklenburg-Vorpommern10.69% - 13.64%
Lower Saxony10.07% - 12.45%
North Rhine-Westphalia11.57%
Rheinland-Pfalz10.07%
Saarland11.57%
Saxony8, 57% - 12, 14%
Saxony-Anhalt10.07% - 13.64%
Schleswig-Holstein11.57% - 15.14%
Thuringia11.57% - 15.14%


Table - Cost structure without brokerage fees

stateSum of the purchase costs
Baden-Wurttemberg6.5%
Bavaria5%
Berlin7.5%
Brandenburg8th %
Bremen6.5%
Hamburg6%
Hesse7.5%
Mecklenburg-Vorpommern6.5%
Lower Saxony6.5%
North Rhine-Westphalia8th %
Rheinland-Pfalz6.5%
Saarland8th %
Saxony5%
Saxony-Anhalt6.5%
Schleswig-Holstein8th %
Thuringia8th %

Real estate transfer tax

The real estate transfer tax is payable on every purchase of a property from 2500 euros and can be up to 50 percent of the purchase costs. This is a one-time tax that the tax office demands. Not to be confused with the annual land tax on real estate, which is demanded by the cities and municipalities. The calculation basis for the real estate transfer tax is the selling price of the property.

Note: The real estate transfer tax is only limited to the value of the land if the buyer starts building the house there at a later date. For this purpose, the conclusion of the contracts, but temporally and in terms of content separately. In this aspect, there is no land transfer tax for house building.

There are several exceptions where the tax office does not require a real estate transfer tax.

  • Divestments between spouses and registered partners
  • Property value under 2500 €
  • Real estate sales between directly related persons: parent-child (also adopted)
  • Gift of directly related persons as well as spouses and life partners
  • Co-heirs by Nachlassteilung

According to § 13 para. 2 GrEStG, although owners and purchasers are considered as tax debtors, the purchase contract clearly defines who pays the land transfer tax and that is in most cases the buyer. Thus, the real estate transfer tax can hardly be avoided in the purchase costs.

tax rates

Depending on the federal state, the amount of the real estate transfer tax is between 3.5 and 6.5 percent of the real estate purchase price . This applies equally to land as well as to apartments and houses alike.

tax ratestates
3.5%Bavaria, Saxony
4.5%Hamburg
5.0%Baden-Württemberg, Mecklenburg-Vorpommern, Lower Saxony, Rhineland-Palatinate, Saxony-Anhalt, Bremen
6.0%Berlin, Hesse
6.5%Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein, Thuringia

The tax rates are so different high, because until September 1, 2006, the tax rates nationwide uniformly at 3.6 percent. Since the federal states are allowed to set this tax rate itself, this has increased dramatically. Only in Bavaria and Saxony, the land transfer tax is still at 3.5 percent. These increases are a welcome source of income for some states, as anything over 3.5 percent is no longer part of the national financial equalization system.

brokerage costs

The brokerage commission is also hard to avoid, as brokers are often the best and easiest way to acquire an object, which fits their own expectations. As with the land transfer tax, there are also regional brokers at the brokerage.

Realtor commissionstates
3.57%North Rhine-Westphalia, Rhineland-Palatinate, Saarland
3.57% to 4.76%Baden-Württemberg, Bavaria
3.57% to 5.95%Bremen, Lower Saxony, Hesse
3.57% to 7.14%Saxony, Saxony-Anhalt, Schleswig-Holstein, Thuringia
4.19% to 7.14%Mecklenburg-Vorpommern
5.95% to 7.14%Berlin
6.25%Hamburg
7.14%Brandenburg

Note: In most federal states, the brokerage commission is split between buyer and seller, but the so-called "ordering principle" does not apply to real estate sales, but only to letting. So you have to expect to pay the brokerage commission, even if the seller has hired the broker.

Since brokers often charge more than 3.5% plus sales tax, you should first be thoroughly informed about the brokerage fee and contractually set them so that they must not be exceeded. The brokerage fees thus account for a not inconsiderable share of the purchase costs. It is therefore important to find the right broker for your needs. If you have found a broker, then find out about his references and inquire in person with the owners. Check the qualifications of the broker and how long he has been real estate broker, especially in their region.

Pay attention to the following points for the brokerage fee

  • Fees are tax deductible only in exceptional cases
  • the commission has to be paid within 3 weeks
  • Brokerage fees are also due when the sales contract is terminated retrospectively
  • If different brokers have been commissioned - the fees can double
  • Purchase price may already include brokerage fees, eg for new construction projects
  • Brokers may charge higher fees for low value properties

notary fees

For the purchase of a property always a notary is required, because without a notarization a purchase contract is ineffective. The cost for the notary is about 1 percent of the purchase price. Among the tasks of the notary include the identification of identities and the preparation of purchase contracts. He also initiates the registration of the new owner in the land register and the cancellation of the old owner in selbigem. If you take further additional services of the notary to claim, then the notary fees may increase.

Legal Description

After the notary has initiated the entry of the new owner in the land register, the land registry takes the registration and the buyer becomes the new owner of the property. For registration, a fee of approximately 0.5 percent of the purchase price is due . Thus, the land register entry represents the smallest item of the purchase costs.

Note: If funded, credit institutions will require the registration of a mortgage in the land registry as collateral.

Calculate purchasing costs

In order to show you what the cost structure of the incidental purchase costs is, we have prepared a comparative calculation. As a reference object, we have used a detached house, with 5 rooms and 100 square meters of living space, for 440, 000 euros for the calculation. The property is to be located in Hesse and it is a brokerage commission of 5.95 percent agreed. The notary fees and the land register entry are estimated at 1.5 percent.

Cost of purchasingcalculation
purchase price440, 000 €
Real estate transfer tax26, 400 €
Brokerage commission (net)26, 180 €
19% sales tax on brokerage commission4, 974 €
Notary fees and land register entry6, 600 €
Total of the total costs504, 154 €
Sum of the purchase costs64.154 €

The purchase costs are in our example 64.154 euros. This is 12.7 percent of the purchase price and these are not co-financed by the banks, so the buyer must finance from its own funds. Add to that the 20 percent equity on top of that, which you need for a bank loan, then add another 88, 000 euros. This makes together 152.154 euros you would have to finance yourself.

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Additional purchase costs

In addition to the normal purchase costs, depending on the condition of the property, additional costs may be incurred. Any incidental purchase costs that may occur need to be factored into your financial planning so you will not suffer any financial disaster and may need an expensive refinancing.

modernization costs

Anyone who has bought a house or apartment may need to plan renovation and modernization costs. Especially with older properties, it may be necessary to refurbish because windows, doors and roof must be renewed, as they may not have the necessary energy efficiency. If, for example, an energy renovation is necessary, you should consider whether this could be subsidized by the state.

development costs

Anyone who wants to buy a plot of land to build his own home should first check how far the building land has already been developed. It would be optimal if the building land is fully developed or the development costs are included in the purchase price. You do not get around most of the development costs, because only for a developed plot of land is a building permit granted.

Note: Before purchasing a piece of land, ask the responsible building authority about how high the development costs can be.

The items for the development include:

  • electricity
  • Gas (not absolutely necessary)
  • water
  • telecommunications

The costs are not fixed, since these are based on the distance to junction, but you can estimate for the items electricity, gas and water each about 2000 euros. The connection to the telecommunications network is often a bit cheaper. But even when buying a house can still be incurred development costs. Of course, anyone who buys an old existing property does not expect to incur additional development costs, since electricity, gas and water pipes are laid out, but one should check whether the development costs have already been billed. Check with your broker or community about whether the development costs are already settled. Development costs are a big issue and if you need more information, you can find out all you need to know in our Talu contribution " Property Development Costs - Costs per m² ".

Subsequent costs

After purchasing a property, regular costs are incurred, in addition to the monthly mortgage repayment installment. These include, for example, costs such as property tax, homeowners insurance and personal liability insurance for homeowners or homeowners liability insurance. Of course, electricity and heating costs and fees for refuse disposal and the like continue to fall, as with all other households too.

Tips for quick readers

  • Purchase costs are regionally very different
  • the purchase costs can amount to between 10 and 15% of the purchase price
  • Banks do not finance the purchase costs
  • Calculate if additional costs could be incurred
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