Understanding stamp duty in Germany

Buying Property in Germany is very uncomplicated for overseas buyers if you know how - but not knowing your transaction costs can turn a great investment into a nightmare.

Knowing how much you can afford means doing proper research on all costs associated withyour property investment.

The stamp duty (Grunderwerbssteuer (GrESt)) is a tax that is payable on the acquisition of a property or part of a property.

What is stamp duty?

Stamp duty is a federal state based tax and can vary from federal state to federal state based on the purchase price of the property in Germany. Depending on the federal state, the tax rate is between 3.5% (Bavaria and Saxony) and 6.5% (Schleswig-Holstein, North Rhine-Westphalia, Saarland, Brandenburg and Thuringia) of the tax base.

Who has to pay?

The buyer of the property is obligated to pay the stamp duty.

How to calculate Stamp Duty? What is the rate?

It is a fixed percentage of the purchase price of the property. Germany has 16 federal states and each state has its ownrate.

When do you have to pay?

After receiving the stamp duty notice from the local tax authority, the buyer stamp duty has to be paid within 30 days or else you may incur a penalty tax.

What are the other costs of buying properties in Germany?