Buying and selling property in Germany comes with a wide range of incidental costs. Keeping track of them is not always easy. This article outlines the most common cost items and gives a general sense of the expected amounts.
Notary fees
Notary fees are typically borne by the buyer. These fees are not negotiable but are precisely defined by law. The basis for this is the Court and Notary Costs Act (GNotKG). A large share of the fees depends on the transaction value. For a purchase contract, the transaction value is usually the purchase price; for property encumbrances (land charge, mortgage) it is the nominal amount of the secured claim. The table in Section 34 (2) GNotKG sets the basic fee for the relevant transaction value (a more detailed version, but only up to three million euros, is found in Annex 2 to Section 34 (3) GNotKG). The fee determined that way is then multiplied by the fee factor (for example 0.2, 0.5 or 2.0) of the relevant fee item from Annex 1 to Section 3 (2) GNotKG. The annex specifies whether the fee is calculated using Table A or Table B. Notary fees are all calculated using Table B. As a rough rule of thumb, notary fees come to about one percent of the purchase price; the fee schedule is degressive, so the percentage drops as the purchase price rises. For notary and land registry costs combined, a total of about 5.5 times the basic fee is a reasonable estimate.
Example 1: Notarization of a purchase contract
The notary notarizes a property purchase contract with a price of 1,000,000 euros. They charge a 2.0 fee (No. 21100). At a transaction value of 1,000,000 euros, the basic fee is 1,735.00 euros net and the 2.0 fee comes to 3,470.00 euros net. Additional 0.5 fees may apply for execution (No. 22110) and supervision (No. 22200) of the transaction.
Example 2: Certification of a release authorization
The seller's bank gives its consent to the deletion of a land charge of 500,000 euros. This release authorization must be notarized for the land registry office. A signature certification (No. 25100) triggers a 0.2 fee. At a transaction value of 500,000 euros, the basic fee under Table B is 935.00 euros net. A 0.2 fee would come to 187.00 euros net. However, the certification fee is capped at 70.00 euros net, so only those 70.00 euros apply for the certification itself. The notary will also add a flat fee of 20.00 euros net for postage and telecommunications. In total, the notary fees come to 90.00 euros net or 107.10 euros gross.
Fee calculator
A fee calculator (which does not factor in minimum or maximum fees) is provided by the German Notary Chamber on its website (https://www.notar.de/themen/notarkosten/gebuehrenrechner).
Notarization in a foreign language
Notarized deeds are generally drafted in German. If the notary has sufficient foreign language skills, notarization can be carried out fully or partially in another language. This additional service increases the notary fees by 30 percent, but no more than 5,000 euros.
Land registry fees
Beyond notary fees, fees apply for entries in the land register. Land registry fees are based on the transaction value and the fee schedule in Annex 1 to the GNotKG, just like notary fees. Registering a priority notice (No. 14150) triggers half a fee; registering the buyer as the new owner (No. 14110) costs a full fee. Registering mortgages, land charges and other property encumbrances (No. 14120) again triggers a single basic fee.
Bank fees when selling
Banks are typically involved in property transactions as well. If the property has been used as collateral by the existing financing bank, the encumbrance registered in the land register must be deleted before ownership changes, since the property is usually transferred unencumbered. Banks may not charge a fee for the release authorization for the land charge or mortgage itself; the seller, however, bears the notary fees for the signature certification. As shown in Example 2, this fee is capped at 107.10 euros gross.
Deletion of the land charge in the context of a property purchase is treated as part of the same notarization, so no additional notary fees apply for the notarization itself.
Taxes
Property transfer tax
For taxes: the purchase triggers property transfer tax. By law, both buyer and seller are jointly liable; in practice it is almost always agreed contractually that the buyer alone bears the property transfer tax. It must be paid to the tax office before ownership transfers, since otherwise the tax office will not issue the clearance certificate required by the notary and the buyer cannot be entered in the land register. The rate of the property transfer tax depends on the federal state in which the property is located and ranges between 4.5 percent and 6.5 percent of the purchase price. In Berlin, 6.0 percent property transfer tax currently applies.
Speculation tax
The seller may also be liable for what is known as speculation tax. Detailed information on the requirements and the size of the tax burden can be found in the previous article.
Read the other parts of this feature:
- Property purchase contracts in Germany. Part I: A secure process
- Property purchase contracts in Germany. Part II: Before the notary appointment
- Property purchase contracts in Germany. Part III: The right of first refusal
- Property purchase contracts in Germany. Part IV: The speculation period
Disclaimer
This article is provided for general information only and does not constitute legal or tax advice. It is no substitute for individual advice from a lawyer, notary or tax advisor. We make no warranty and accept no liability for the accuracy, completeness or timeliness of the content. Statutes, fees and tax rates may change.
