The SPD and CDU have agreed during coalition negotiations: starting April 1, 2012, Berlin's property transfer tax (Grunderwerbsteuer) will rise from 4.5 to 5.0 percent. The SPD district association in Friedrichshain-Kreuzberg had pushed for 7 percent. The compromise is well below that.
What this means in euros
On a purchase price of 500,000 euros, the tax increases from 22,500 to 25,000 euros. The 2,500 euro difference must come from equity, as banks do not finance the transfer tax. This applies to all transactions, from a single apartment to an apartment building.
Until the 2006 federalism reform, the rate was uniformly 3.5 percent across Germany. Since then, each state sets its own rate. Berlin first raised it to 4.5 percent on January 1, 2007. The current increase is the second within five years. For comparison, neighboring Brandenburg still charges 3.5 percent. Anyone looking to buy apartments in Berlin should factor this difference into their calculations.
Deadline to note
Anyone wanting to benefit from the current rate must have the purchase contract notarized before April 1, 2012. Berlin's notary offices are expected to see high demand in the first months of 2012.
Disclaimer
This article is for general information only and does not constitute tax or legal advice. The content does not replace individual consultation with a tax advisor or attorney. No liability is assumed for accuracy or completeness.
