When buying a property, the real estate transfer tax (Grunderwerbsteuer) plays a central role: it is one of the incidental acquisition costs that you should factor into your calculations from the very outset. But how high is it in North Rhine-Westphalia (NRW), who bears it, and when do you have to pay? We explain the most important connections clearly and concisely, so that you can plan your property purchase on a secure footing right from the start.
What is the real estate transfer tax, and how high is it in NRW?
The real estate transfer tax (Grunderwerbsteuer) becomes payable as soon as a developed or undeveloped plot of land in Germany changes ownership. Alongside notary and land registry costs, it is one of the classic incidental purchase costs and should therefore be taken into account from the outset in any sound financing plan.
The rate of the tax is set by the individual federal states themselves. The nationwide standard principle is 3.5 per cent, but the states are permitted to deviate from this, and they do so considerably. In North Rhine-Westphalia, the tax rate is 6.5 per cent, making it one of the highest in Germany. By way of comparison: in Bavaria it is just 3.5 per cent, while in Hamburg and Saxony it is 5.5 per cent in each case.
An example for orientation: for a purchase price of 500,000 euros for a property in Düsseldorf, this amounts to 32,500 euros in real estate transfer tax. Those who are aware of this item early on can set up their financing realistically and avoid nasty surprises shortly before the notary appointment.
Who pays the real estate transfer tax: buyer or seller?
A closer look pays off here: by law, buyer and seller are jointly liable for the tax, as so-called joint and several debtors under Paragraf 13 (Section 13) of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz). This means that the tax office could, in principle, demand the tax from both parties to the contract.
In practice, however, the situation is different: in almost all purchase contracts it is agreed that the buyer bears the real estate transfer tax. This arrangement is customary and in line with market practice, and is recorded accordingly in the notarial purchase contract. For you as the buyer, this means: factor the tax firmly into your equity requirement, as most banks do not finance the incidental acquisition costs, or only do so in part.
Assessment basis: what is the tax calculated on?
The real estate transfer tax is calculated on the value of the consideration, which, in a normal property purchase, is as a rule the agreed purchase price. This is governed by Paragrafen 8 und 9 (Sections 8 and 9) of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz).
A practical tip that can save real money: movable items that are not permanently attached to the property are, as a matter of principle, not part of the assessment basis. These include, for example, a high-quality fitted kitchen, a sauna or awnings. If such items are shown separately in the purchase contract with a realistic value, the amount subject to real estate transfer tax is reduced accordingly. It is important that the values are reasonable and verifiable. How best to structure this cleanly in an individual case is something you should discuss with your tax adviser.
Due date, tax assessment notice and the path to the land register
The real estate transfer tax does not become due as early as the notary appointment. The procedure follows a clear sequence: first, the notary notifies the competent tax office of the certified purchase contract, which they are obliged to do under Paragraf 18 (Section 18) of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz). The tax office then issues the real estate transfer tax assessment notice (Grunderwerbsteuerbescheid), stating the exact amount and the payment deadline. Only then does the tax become due, usually within one month of receipt of the notice.
As soon as you have paid the tax, the tax office issues the so-called clearance certificate (Unbedenklichkeitsbescheinigung) under Paragraf 22 (Section 22) of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz). This document is the decisive key: the land registry may only enter you as the new owner in the land register once this certificate is available. It is only upon entry in the land register that you become the legal owner of the property. Those who understand the procedure can plan the timing in a relaxed manner.
Exceptions and exemptions: when no real estate transfer tax is payable
In certain cases, no real estate transfer tax is payable at all. These exemptions are governed by Paragraf 3 (Section 3) of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz). The most important include:
- Acquisition by close relatives in the direct line: transfers between parents and children, grandparents and grandchildren are exempt from tax. Stepchildren are treated on a par with children, and their spouses too, such as children-in-law, are covered.
- Acquisition by spouses and registered civil partners: if one spouse transfers a share in a plot of land to the other, this remains free of real estate transfer tax.
- Division of assets following divorce: if a former spouse acquires a plot of land as part of the division of assets after the divorce, this too is exempt.
- Inheritance and gift: transfers of land upon death or by way of gift are subject to inheritance and gift tax law and not to real estate transfer tax.
- De minimis threshold: if the relevant value does not exceed 2,500 euros, the acquisition remains tax-free. Please note: this is an exemption limit (Freigrenze); if the amount is exceeded, the entire acquisition becomes taxable.
Whether one of these exceptions applies in your specific case can only be assessed individually. Your tax adviser will classify this bindingly for your personal situation.
Plan incidental acquisition costs wisely, with a strong partner at your side
The real estate transfer tax is just one of several building blocks of a successful property purchase. What matters is that you keep the overall picture in view: from a realistic purchase price through the incidental costs to a smooth process all the way to the land register. This is precisely where our experience comes into play.
As the arm of Wolfgang Richter GmbH, we have been supporting owners and buyers in the Düsseldorf and North Rhine-Westphalian market for more than six decades. Over the years, an established network of more than 20,000 contacts has grown, which helps us to bring buyers and suitable properties together discreetly and purposefully. On request, confidential marketing away from the major portals is also an option. We work transparently, personally and with the ambition that you understand every step, including the tax framework of your project.
Whether you wish to sell or to buy: do get in touch with us. We take the time to address your questions and, together with you, find the path that suits your situation.
