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Acquisition costs
incidental acquisition costs or ancillary purchase costs
Anyone looking to buy or build a property should not underestimate the additional costs. The purchase price represents the greatest financial burden when buying a property.
What costs should one expect?
When purchasing real estate, additional costs arise, known as ancillary purchase costs, which go beyond the purchase price. Anyone looking to buy a property should plan for these costs in good time. The acquisition costs are due shortly after the purchase of the property, which is why they should be paid from liquid funds.
Incidental acquisition costs include the following:
- Notary fees apply for the notarization of the purchase agreement, as every purchase agreement must legally be notarized by law. The amount of the notary fees is regulated by law and state-monitored. This means that the fees are the same at every notary.
- Financing is essential for the majority of property buyers, which requires a land charge to be entered in the land register. This requires notarization and comes with additional fees. These notary costs are about 1 % to 2 % of the purchase price.
- Costs for the transfer of ownership and entries in the land register. They amount to approx. 0.5 % of the purchase price.
- Potentially a broker commission. The amount of the commission can vary depending on the region, typically ranging between 3 % and 6 % plus VAT.
- Real estate transfer tax. The amount of the real estate transfer tax varies depending on the federal state. It is at least 3.5 % of the total purchase price, and in some federal states even 6.5 % (as of 2016). The amount of the real estate transfer tax in Bavaria is 3.5 % (as of 2019). The real estate transfer tax is to be paid by the buyer.
- Normally, the purchase price serves as the basis for calculating the real estate transfer tax. Nevertheless, furnishings located in the property are not subject to real estate transfer tax. Therefore, if the house contains a fitted kitchen, among other things, and the value of this kitchen is specified in the purchase contract, the real estate transfer tax is reduced accordingly. All furnishings must be listed in an inventory including their respective prices.
You can find further information on real estate transfer tax under the following article. We have created an overview of the real estate transfer tax rates for you, which you can find in the table below.
Real estate transfer tax rates of the federal states
Bavaria: 3.5 %
Baden-Württemberg: 5.0 %
Berlin 6.0 % since Jan 1, 2014
Brandenburg 6.5 % since July 1, 2015
Bremen 5.0 % since January 1, 2014
Hamburg 4.5 %
Hesse 6.0 % since August 1, 2014
Mecklenburg-Vorpommern 6,5 %
Lower Saxony 5.0 % since January 1, 2014
North Rhine-Westphalia 6.5 % since January 1, 2015
Rhineland-Palatinate 5.0 % since 2012
Saarland 6.5 % since January 1, 2015
Saxony 3.5 %
Saxony-Anhalt 5.0 %
Schleswig-Holstein 6,5 % since 2014
Thuringia 6.5 % since 2017
As of February 21, 2019
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