German Property Transaction Tax (Grunderwerbsteuer)
The German Property Transaction Tax (Grunderwerbsteuer) is a real estate transfer tax applied whenever property ownership changes hands in Germany. It is a one-time tax due after purchasing real estate—residential, commercial, or land.
How Much Is the Grunderwerbsteuer?
The rate is set by each federal state (Bundesland) and commonly ranges between 3.5% and 6.5% of the purchase price. The property’s location is therefore a key driver of your total acquisition costs.
Indicative rates by state (examples)
- Bavaria (Bayern): 3.5%
- Saxony (Sachsen): 3.5%
- Hamburg: 5.5%
- Berlin: 6.5%
- Brandenburg: 6.5%
- Thuringia (Thüringen): 6.5%
Who Pays the Tax?
In practice, the buyer is responsible for paying the Grunderwerbsteuer. The notary handling the purchase agreement informs the tax office, which then issues an assessment. Payment is required before you can be registered as the legal owner in the land registry.
When Is the Tax Due?
Shortly after the contract is notarized, the tax authority (Finanzamt) sends the assessment. The deadline is typically around four weeks from the assessment date. Without timely payment, registration in the land register will be blocked.
Are There Exemptions?
Standard property purchases usually trigger the tax. However, exemptions may apply, including:
- Transfers between close relatives (e.g., parents ↔ children)
- Qualifying corporate restructurings
- Transfers via inheritance or gift (subject to other tax rules)
Key Takeaways
- One-time real estate transfer tax in Germany
- Rates vary by state (~3.5%–6.5%)
- Buyer pays; notary notifies the tax office
- Pay before land registry entry can proceed
- Limited exemptions (relatives, restructurings, inheritance/gifts)