Real estate transfer tax on a property purchase: amount, self-assessment, due date

The real estate transfer tax attaches to the acquisition of a domestic property. With a purchase for consideration the basis of assessment is the consideration. This counts above all the purchase price, but also assumed encumbrances or other performances of the buyer. The tax in this case is 3.5 percent of the consideration. We also explain the term in the glossary.

The consideration, however, is only the lower limit if it exceeds the property value. If the purchase price is below the property value, the higher property value forms the basis of assessment. The property value is derived by a separate method from the land and building value or from suitable property prices. With a normal purchase at market prices the purchase price is usually decisive.

For acquisitions without consideration or partly without consideration a different yardstick applies. Here the property value is always the basis of assessment. For transfers within the favoured family circle and for acquisitions on death the graduated tariff also applies. This way the tax burden on gifts and inheritances within the family is significantly reduced.

For transfers without consideration within the favoured family circle the tax is not calculated at the rate of 3.5 percent but by a graduated tariff. For the first 250,000 euro of the property value a rate of 0.5 percent applies, for the next 150,000 euro a rate of 2 percent and for the amount above that the rate of 3.5 percent.

The favoured group of persons includes in particular spouses and registered partners, parents and children as well as further close relatives. What matters is that the transfer takes place without consideration or only partly for consideration. If a purchase price is agreed that lies above a certain limit relative to the property value, the acquisition may count as for consideration and the standard rate applies.

Several acquisitions without consideration between the same persons within a certain period are added together for the graduated tariff. This aggregation is meant to prevent a larger transfer from being taxed more favourably by being split into several small steps. Whether and how the graduated tariff applies in the individual case should be clarified before drafting the contract.

In practice the real estate transfer tax is almost always levied by way of self-assessment through the party representative. The lawyer or notary who draws up the purchase contract calculates the tax himself, reports it to the tax office and remits it. Only afterwards can ownership be registered in the land register, because the clearance towards the tax office is established.

With the self-assessment the party representative takes responsibility for the correct determination and timely remittance of the tax. He is liable for the self-assessed amounts. For the buyer this has the advantage that the handling with the tax office comes from one hand and the registration in the land register is quickly possible.

The tax liability arises with the conclusion of the obligating transaction, that is with the effective purchase contract. The party representative remits the self-assessed tax to the tax office in time. So that the funds are available in time, the real estate transfer tax should be planned into the financing from the start. How the payment runs through the escrow agent is shown in our post on paying the purchase price via escrow.

The real estate transfer tax is only one of several items of the incidental purchase costs. On top come the registration fee for ownership of 1.1 percent, the costs of drawing up the contract and the escrow handling as well as any agent costs. An overview of the total burden is given by the incidental costs calculator.

If you finance the purchase through a bank, a separate registration fee applies for the mortgage. How financing through a mortgage lien is secured is explained in our post on financing, mortgage and priority ranking. This way you see which fees come together on the buyer side.

While the buyer bears the real estate transfer tax, a different levy meets the seller: the real estate capital gains tax on the gain from the sale. Which tax falls due on the sale and which reliefs apply is dealt with in our post on the real estate capital gains tax for sellers.