Buying real estate - operating costs in Germany

Buying real estate - operating costs in Germany

Buying real estate in Germany, one should be aware of considerable operating costs in addition to property related advance payments. So, in addition to a transaction tax, notarial fees and a contribution to the cadastral register must be paid on a mandatory basis which totals a large amount

The average house price in Germany is currently about € 250,000. When buying a house in Bavaria, you must pay a land transfer tax at a rate of 3.5%; in North Rhine-Westphalia — 6.5%. Thus, the tax may vary from € 8,750 to € 16,250. Moreover, the purchase must be notarized which is mandatory in Germany. The notarial fee depends on the real estate value. In the simplest case, the notarial fee will be about 0.8% of the property value. If it is a mortgage loan, the fee makes +1%. An entry in the land register is 0.3–0.5%. In general, the additional costs of the transaction will make between 4.6 and 8.0% which is equivalent to € 11,500 – € 20,000. The real estate agent fee will also add to the amount, but as using brokers is not mandatory, these costs are excluded from the calculation.Examples from other countries show that such high operating costs are not necessary (see the table).


In the Netherlands the land transfer tax has been reduced to 2%. The notarial fee is also mandatory, but the price ranges from € 700 to € 1,000 depending on the real estate value. The land registry prices are fixed and a sequence lower. Even if you buy a house in England at the value of £ 215,000 (about € 250,000), it will make only 0.8%. Unlike Germany and the Netherlands, there is no uniform property tax, but there is a progressive tax rate. This ensures that the tax burden is reasonable, especially for low income families that tend to buy cheaper houses. Another characteristic feature of the British system is that notaries are not required. Expenses, including expert examination and land registry, make up less than £ 1,000. So in total, given the same property value (€ 250,000), in the Netherlands, additional costs will amount to € 6,500, and in the United Kingdom only € 3,250. In comparison with the German buyer, savings constitute up to € 13,500 or € 16,750 respectively. Nevertheless, do not make sudden conclusions. The area of a house in England will be much less than in Germany for the same money, but the location will be much less advantageous. The cost of accommodation in England is overstated three times and continues growing every year. According to experts, this trend has been observed over the last 10 years.