Increase of the real estate transfer tax in Berlin to 6% from 1.1.2014

Senate decides draft for the next double budget.

by Peter Guthmann Published on:

The Senate of Berlin has decided the double budget for the years 2013 and 2015. Although there still exist discussions about increasing rents and prices for real estate in Berlin, an increase of the property transfer tax from 5% to 6% from 1.1.2014 has been decided.

The real estate transfer tax was raised only in April 2012 from 4.5% to 5%. The estimated additional revenues due to another increase amount approx. 100 millions Euro per year.

About 180,000 Berlin citizens had gone astray by the census from 2011. As over-paid money from the inter-state fiscal equalisation system now is required to be returned and the loss of revenues to be compensated, the Senate is searching for new (well-known) sources of income. Berlin real estate and its purchasers are, in keeping with tradition, at the top of the list for the Berlin's Senator for Finance in order to quickly and easily get money.

The continuing high demand for Berlin properties and the consistent move to the capital make the market for real estate in Berlin a reliable source of income for the Senate.

How this new increase will impact rents, appears to be a low-priority issue for the coalition in Berlin. The discrepancy how the issue "living and renting" is being transfered to the outside on the one hand, and how it is implemented real politically on the other side, is becoming visible. Making properties more expensive means in turn also accepting rent increases. With the new increase of the real estate transfer tax, also an increase of the land taxes becomes possible. Land taxes belong to the additional charges that can be apportioned to the tenants.