Taxes in Germany

Purchase

A real estate purchase tax (Grunderwerbsteuer) of 6% is levied on the property value, and 19% VAT applies to agent and notary fees.

Ownership

Real estate tax (Grundsteuer) typically ranges from €600 to €1,200 per annum, depending on property type, location, land plot size and time of construction.

Lease

Personal income tax (Einkommensteuer) for individuals is calculated based on the owner's income value at a progressive rate from 14.77% to 47.475%, and includes a solidarity surcharge (Solidaritätszuschlag).

Corporate tax (Körperschaftssteuer) for legal entities is fixed at 15.825%, including a solidarity surcharge.

The income tax is levied on the margin between all the profits generated and all the expenses incurred (include purchase costs, utility bills, management company fee, property tax, loan interest, land tax and building depreciation expenses (2% to 3% of the building's value per annum).

Sale

The capital gains tax (Kapitalertragsteuer) rate is the same as for income tax. The tax base is calculated by deducting purchase and depreciation expenses from the proceeds of the sale.

Individuals do not need to pay capital gains tax given if 10 years have passed since the initial purchase of the property, or if the property has been used only as a personal residence for at least three years before the sale.

Donation and inheritance

Inheritance and gift tax (Erbschaftsteuer und Schenkungsteuer) is payable by the property recipient. The tax rate ranges from 7% to 50% depending on the degree of relation and the property's value.

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