Real Property Taxes in Germany 2018
Every property owner has to pay property taxes in Germany. He is liable to pay real property taxes (so called “Grundsteuer”). The tax rate depends on the type of real property. This is sorted into two distinct categories:
- Real property tax “A”: Real property used for agriculture and forestry.
- Real property tax “B”: Constructible real property or real property with buildings.
Real Property Tax Rate 2018
The real property tax burden is calculated by multiplying:
- the assessed value of the real property
- the real property tax rate
- the municipal multiplier
The assessed “real property Taxes in Germany 2017” value is determined by the tax authorities according to the German Assessment Code (Bewertungsgesetz). The German Assessment Code refers to historical property values that are usually significantly lower than current market value. You can take a look of actual reasons for the high market value of german properties in our article: Buying a property in Germany – 6 Best Reasons for Foreigners.
The real property tax rate depends on the type of real property. The tax rate is e.g. 2.6‰ (0.26 percent) for property used for (semi-) detached houses with a value of up to EUR 60,000 and 3.5 ‰ (0.35 percent) for all remaining types of real property (including commercially used real property).
Similar to the municipal multiplier applied in the trade tax case, the municipal multiplier applied to real property tax is stipulated by each municipality. Municipalities determine a municipal multiplier for both real property tax “A” and real property tax “B”, with the rate for “B” usually being higher.
Determining Burden of
Property Taxes in Germany 2018
Real property tax burden for a commercial building in a municipality with an average real property tax “B” collection rate of 350 percent:
|Assessed Value||EUR 1,000,000 (e.g.)|
|x Basic property tax rate||x 0.35 percent|
|x Muncipial multiplier “B”||x 350 percent|
|= Property tax burden||= EUR 12,250|
Real Property Transfer Tax
When domestic real estate is sold or changes owner, a one-time real property transfer tax (Grunderwerbssteuer) of the purchase price is levied if the purchase price or consideration exceeds EUR 2,500. Real property transfer tax is usually paid by the buyer. The tax rate varies from federal state to federal state. Please see the table below for more information.
Real Property Transfer Tax Rates in the Respective Federal States 2018
|5.0%||Baden-Württemberg, Bremen, Mecklenburg-Vorpommern,
Niedersachsen, Rheinland-Pfalz, Saxony-Anhalt
|6.5%||Brandenburg, North Rhine-Westphalia, Saarland,
Real property transfer tax also applies to a real property-owning partnership if 95 percent of the shareholders change within five years. If you need further details on property taxes in Germany you can follow this link to a good article from Wikipedia.
Questions and Feedback
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