Since September 2006 the real estate transfer tax became a federal state matter, and ever since turned out to be a lucrative source of income for the individual states. The balance sheet for 2013: revenues amounting to 8.39 billion Euro. The formerly nationwide fixed rate of 3.5 percent is history in many federal states. Real estate transfer taxes in the amount of five or six percent are not uncommon as well as a continuing upward tendency. Now North Rhine Westphalia is following this trend. According to the plan of the red-green state government, the real estate transfer tax is to be increased from 5 to 6.5 percent as of January 1, 2014. The resulting additional revenues caused by the planned tax increase are expected to amount up to 400 million Euro and are supposed to be used for the fiscal consolidation. In 2015, North Rhine Westphalia, along with Schleswig-Holstein and Saarland, will position itself at the top of the nationwide ranking concerning real estate transfer taxes. Those who want to purchase a property in North Rhine Westphalia in 2015 for 250,000 Euro, has to spend an additional 16,250 Euro for the real estate transfer taxation – 3,750 Euro more than on the basis of the current tax rate of 5 percent.
Not only in North Rhine Westphalia real estate and property investors are asked to pay up, in other states the real estate transfer tax has been raised constantly. At the beginning of 2014 Berlin, Bremen, Lower Saxony, and Schleswig-Holstein decided to increase the taxation of real estate transfers. On August 1, Hesse caught up by raising the real estate transfer tax from five to six percent. North Rhine Westphalia already increased the tax in 2012 from 3.5 to five percent. Saarland plans to raise the real estate transfer tax on January 1, 2015 up to 6.5 percent. The formerly tax rate of 3.5 percent applies only in Bavaria and Saxony.
The real estate transfer tax is to be paid as soon as a purchase contract concerning a property (with or without a building), a house, or an apartment is entered in Germany. The amount of the tax is calculated on the value of the corresponding consideration, usually the buying price determined in the purchase contract. Additional costs like in personam adopted loan contracts, estate agent’s fees or survey costs can be included in the basis of assessment. If not otherwise agreed on, the purchaser has to pay the real estate transfer tax. In case of a gift or succession, the real estate transfer tax is not applicable. In those cases, the taxation is subject of the inheritance and gift tax laws. Excepted are also sales with a purchase price below the amount of 2,500 Euro.