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Worth knowing - Incidental purchase costs

In addition to the purchase price, further costs such as notary fees, land transfer tax and brokerage fees may be incurred when buying a property.

Note:

In Germany, real estate transactions may only be carried out via notaries.

Notary fees:

The notary's office charges notary fees for the purchase and processing: preparation of the purchase contract, notarization, processing of the purchase contract in the land register. In addition to the registration costs at offices (e.g. entry in the land register at the land registry), fees may be incurred for the creation of a land charge. In total, notary and land registry fees should be calculated at around 2% of the purchase price.

The notary fees are borne by the buyer, who therefore usually also appoints the notary for the transaction.

Note: 

There is no legal provision as to who appoints the notary. The notary is fundamentally obliged to remain neutral and must therefore draw up a contract that takes into account the interests of both parties. The notarial processing of the purchase contract and the fees incurred are determined by law. 

Real estate transfer tax:

The state levies a one-off real estate transfer tax on the purchase or donation or other legal transactions that result in the transfer of undeveloped or developed land. The amount of land transfer tax varies depending on the federal state and is between 3.5% (e.g. Bavaria) and 6.5% (e.g. North Rhine-Westphalia).

Brokerage fees:

If a professional estate agent is used for the sale of a property and a purchase contract has been brokered, estate agent fees are incurred. Estate agent fees are generally determined by market or local rates and can amount to between 3.57% and 7.14% of the purchase price, including VAT.

In most cases, fees are split equally between the contracting parties. This means that the external commission (buyer's share) and the internal commission (seller's share) are identical and mainly amount to 3.57% of the purchase price including VAT.

The contracting parties are only obliged to pay once a legally binding purchase agreement has been brokered by the estate agency. This is the case as soon as the purchase agreement has been signed by both parties and notarized.

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