The purchase price is only part of the picture: anyone buying a house in North Rhine-Westphalia (NRW) must reckon with considerable incidental purchase costs on top. Real estate transfer tax (Grunderwerbsteuer), notary and land registry fees and, where applicable, the estate agent's commission quickly add up in NRW to around 11 to 12 per cent of the purchase price. It is precisely this amount that is so often underestimated during planning, because banks generally do not finance it. We explain clearly and without sugar-coating which items make up these incidental costs, how high they are and how much equity you should plan for.
What are the incidental costs of buying a house?
Incidental purchase costs are all the costs that arise when acquiring a property in addition to the actual purchase price. They are incurred regardless of whether you buy a detached house, a freehold flat or a plot of land. In North Rhine-Westphalia they are essentially made up of three components:
- Real estate transfer tax (Grunderwerbsteuer): a tax payable to the tax office, in NRW 6.5 per cent of the purchase price.
- Notary and land registry costs: for the legally mandatory notarisation and the entry in the land register (Grundbuch), together around 1.5 to 2 per cent.
- Estate agent's commission: only payable if an estate agent is involved; the buyer's share in NRW is usually around 3.57 per cent including VAT.
In total, you should therefore reckon in NRW with roughly 11 to 12 per cent of the purchase price in incidental costs if an estate agent is involved. Without an estate agent, the amount drops to around 8 to 8.5 per cent. This range is not a statutory flat rate but a reliable empirical value for the North Rhine-Westphalian market.
Real estate transfer tax in NRW: 6.5 per cent
The single largest item among the incidental purchase costs in North Rhine-Westphalia is the real estate transfer tax (Grunderwerbsteuer). The rate is set by the individual federal states, and with 6.5 per cent of the purchase price NRW is among the states with the highest rate. According to the NRW tax authority, this percentage applies to all contracts notarised on or after 1 January 2015.
The assessment basis under Sections 8 and 9 of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz) is generally the agreed purchase price. Although by law the buyer and seller are jointly liable for the tax (Section 13 of the Real Estate Transfer Tax Act), in practice the purchase contract almost always stipulates that the buyer bears the tax. The tax does not fall due at the notary appointment but only after you receive the real estate transfer tax assessment notice from the tax office. Only once it has been paid will you receive the clearance certificate (Unbedenklichkeitsbescheinigung), without which the land registry will not enter you as the new owner.
Notary and land registry costs: around 1.5 to 2 per cent
In Germany, a property purchase is not possible without a notary. Under Section 311b(1) of the German Civil Code (BGB), every contract for the sale of a plot of land must be notarised, otherwise it is void. The notary advises both sides impartially, secures the purchase price and ensures that neither party performs unprotected in advance.
For notary and land registry costs combined, you should budget around 1.5 to 2 per cent of the purchase price. The larger part of this goes to the notary, the smaller part to the land registry. The fees are not negotiable: they are governed by the Act on Court and Notary Costs (Gesetz über Kosten der freiwilligen Gerichtsbarkeit für Gerichte und Notare, GNotKG) and are fixed by law, identical for all notaries at the same transaction value. As a rule, under Section 448(2) BGB the buyer's side bears these costs. If the purchase is financed, the notarisation of the land charge (Grundschuld) for the bank is added, which raises the amount somewhat.
Estate agent's commission: split in half since the end of 2020
If an estate agent acts in the purchase, the agent's commission is added as a third major item. Since 23 December 2020 a nationwide rule has applied to flats and detached houses: under Section 656c BGB, an agent acting for both sides may demand a commission of the same amount from buyer and seller only. And under Section 656d BGB, where only one party has placed the engagement, the agent may demand at most half of the commission from the other party.
In practice, this leads to a 50/50 split when buying a house or a flat. In North Rhine-Westphalia the buyer's share is therefore usually around 3.57 per cent including VAT, which corresponds to 3 per cent net plus 19 per cent VAT. Important to know: this splitting rule applies only to flats and detached houses. For undeveloped plots of land or multi-family buildings, Sections 656c and 656d BGB do not apply, and other models are possible there.
Sample calculation for 500,000 euros in Düsseldorf
A concrete figure makes the scale tangible. We assume a purchase price of 500,000 euros for a property in Düsseldorf, financed and with an estate agent involved:
- Real estate transfer tax (6.5%): 32,500 euros
- Notary and land registry costs (around 1.5 to 2%): about 7,500 to 10,000 euros
- Estate agent's commission, buyer's share (3.57%): 17,850 euros
In total, this results in incidental purchase costs of around 57,850 to 60,350 euros, i.e. about 11.6 to 12.1 per cent of the purchase price. These nearly 60,000 euros are added to the purchase price and, as a rule, must be raised from your own funds. If no estate agent is involved, the amount is reduced to around 40,000 to 42,500 euros, i.e. about 8 to 8.5 per cent. The exact notary and land registry costs depend on the GNotKG and the specific individual case.
Why you should cover the incidental costs from equity
One point is particularly often overlooked in planning: banks generally do not finance the incidental purchase costs. The reason lies in the logic of property financing. A bank measures its loan against the value of the property, the so-called lending basis (Beleihungsgrundlage). Real estate transfer tax, notary and estate agent costs do not, however, increase this value, since they are pure transaction costs which, in the worst case, represent no counter-value for the bank.
For this reason, most banks expect buyers to cover the incidental costs from equity. Anyone wishing to buy a house for 500,000 euros in NRW should therefore keep an eye not only on the purchase price but also have around 50,000 to 60,000 euros of their own funds ready for the incidental costs. Financing that covers the incidental costs in addition to the purchase price is possible in individual cases, but it usually comes with higher interest rates and stricter scrutiny. Realistic cost planning from the outset therefore spares you nasty surprises shortly before the notary appointment.
How we support you with your purchase in Düsseldorf and NRW
The individual items of the incidental purchase costs are largely fixed by law or by market custom, yet it is the smooth process that determines whether a house purchase succeeds in a well-prepared manner. At Richter Immobilien-Transaktionen we support you with your purchase in Düsseldorf and North Rhine-Westphalia throughout the entire process, from checking the documents and realistic cost planning to the notary appointment and the handover. That way you know at every point which steps lie ahead and which costs await you.
For more than 60 years, Wolfgang Richter GmbH has been rooted in Düsseldorf and North Rhine-Westphalia. This experience and a network grown over the years with more than 20,000 contacts give you the assurance of approaching your property purchase well prepared and with robust cost planning.
