Real estate transaction costs and taxes in Germany

Cost

Administrative fees for copies or excerpts from public registers may vary regionally from EUR 10 to EUR 50 (per land parcel).

VAT

Nil

Cost

Administrative fees for copies or excerpts from public registers may vary regionally from EUR 10 to EUR 300 (per land parcel).

VAT

Nil

Cost

EUR 20 (certified) / EUR 10 (uncertified) per extract, EUR 10 (certified) / EUR 5 (uncertified) for electronical excerpt.

VAT

Nil

Cost

Approx. EUR 5 for uncertified electronical excerpt, and EUR 10-15 if rendered by a notary.

VAT

19%

Cost

Hourly rates starting at EUR 80.

VAT

19%

Cost

Variable: approx. EUR 10,000 for office buildings depending on scope.

VAT

19%

Cost

No VAT unless VAT option is made in the SPA (tax election not applicable in case of transfer of business). Typically, the option will only be exercised if and to the extent the purchaser will use the property to provide VATable services.

VAT

19%

Cost

The amount of the real estate transfer tax depends on the federal state where the property is situated. The tax rate is in between 3,5% and 6,5% of the consideration paid by the purchaser.

If 90 % or more of the shares or partnership interest in a German or foreign corporate entity or partnership is acquired by one purchaser or a group of companies qualifying as a so-called RETT-group owning German real estate RETT will be triggered. 

In addition, the transfer of 90 % or more of the interest in a German or foreign partnership within a period of 10 years will trigger RETT. The direct or indirect transfer of 90 % or more of the shares in a German or foreign corporate entity within a period of 10 years to new shareholders will also trigger RETT. 

An exemption is made for transfers of shares in companies listed on a stock exchange in the European Union or the European Economic Zone or a stock exchange notified as equivalent by the European Commission to the extent the transfers were executed on such stock exchange.

Such capital gains are treated as part of the taxable income of the individual or corporation.
Individuals: income tax up to a maximum of 47.475% (including solidarity surcharge); tax exempt e.g. if disposal occurs after more than ten years after acquisition.
Corporations: general corporate tax of 15.825% (including solidarity surcharge) and in addition, unless a certain trade tax exemption applies, also trade tax (approx. 14%–17%)

Such capital gains are treated as part of the taxable income considering the following:

• If the shares are held by a company in the legal form of a corporation, only 5% of the capital gains are part of the taxable income of the company;
• If shares in a property company in the legal form of a corporation are sold by an individual holding at least 1% of the share capital, 60% of the capital gains are part of the taxable income of such individual;
• If shares in a property company in the legal form of a corporation are sold by an individual holding less than 1% of the share capital, a flat tax rate of 26.375% (including solidarity surcharge) applies irrespective of the holding period;
• In case of foreign shareholders exemptions under double tax treaties or domestic tax law for limited taxpayers may apply.