How Much Does It Cost to Buy Property in Germany?

Grunderwerbsteuer (Transfer Tax)

Germany’s property transfer tax — Grunderwerbsteuer — is a flat-rate tax set independently by each of the 16 Bundeslaender (federal states). There are no progressive brackets, no foreign buyer surcharges, and no first-time buyer relief. The same rate applies to residential and commercial property alike.

Current rates by state (2026):

The difference is significant. On a EUR 300,000 property, Grunderwerbsteuer ranges from EUR 10,500 in Bayern to EUR 19,500 in Brandenburg or NRW — a spread of EUR 9,000 just from the state you buy in.

Bayern has maintained the lowest rate in Germany at 3.5% and has never raised it. Several states have increased their rates in recent years: Sachsen jumped from 3.5% to 5.5% in 2023, Hamburg from 4.5% to 5.5% in 2023, and Bremen from 5.0% to 5.5% in July 2025. Thueringen went the other direction, dropping from 6.5% to 5.0% in 2024.

Closing costs

Beyond Grunderwerbsteuer, buyers pay the following:

• Notary Fees (Notarkosten): Regulated by federal law (Gerichts- und Notarkostengesetz). The notary handles the purchase contract, escrow account, and coordinates with the land registry. Fee is based on the purchase price on a sliding scale, typically ~1.5% for mid-market properties. Includes 19% MwSt.
• Land Registry (Grundbucheintragung): Fee for recording the new ownership in the Grundbuch (land register). Regulated fee, typically ~0.5% of the purchase price.
• Agent Commission (Maklerprovision): Since December 2020, residential agent commission must be split equally between buyer and seller. Total commission is typically 5.95-7.14% (including 19% MwSt). The buyer’s share is ~3.57%. The mandatory split applies to apartments and single-family houses — commercial properties are exempt.

If you are financing with a mortgage, there are additional costs:

• Mortgage Registration (Grundschuldeintragung): Fee for registering the mortgage lien (Grundschuld) in the land registry. Approximately 0.4% of the loan amount.
• Notary Fees on Mortgage Deed: Separate notary fee for the mortgage deed (Grundschuldbestellungsurkunde). Approximately 0.5% of the loan amount.
• Property Valuation (Wertgutachten): Independent valuation required by the bank for mortgage approval. Typically EUR 300-600.

Total Kaufnebenkosten (all upfront costs excluding the purchase price) typically run 8-12% depending on the state and whether you use an agent and mortgage. In a high-tax state like NRW or Brandenburg with full agent commission and a mortgage, you can easily exceed 12%.

Ongoing costs

Annual holding costs for German investment property:

• Property Tax (Grundsteuer): Overhauled in the 2025 reform. Calculated as assessed value (Grundsteuerwert) x assessment rate x municipal multiplier (Hebesatz). Varies enormously by municipality — typical range is EUR 300-1,500/year for mid-market residential. Paid quarterly. For standard residential leases, Grundsteuer is usually umlagefähig (recoverable via service charges) if the lease explicitly includes it — see Betriebskostenverordnung (BetrKV).
• Building Insurance (Wohngebaeudeversicherung): Structural insurance covering fire, storm, water, and natural hazards. Typically EUR 120-150/year for an apartment, EUR 250-500/year for a house. Additional Elementarschadenversicherung for flood and earthquake is recommended.
• Landlord Liability Insurance (Haus- und Grundbesitzerhaftpflicht): Covers liability for injuries or damage on your property. Typically EUR 50-150/year.
• Maintenance Reserve (Instandhaltungsruecklage): Rule of thumb: EUR 7-12 per sqm/year, or roughly 1% of property value per year. Budget approximately EUR 3,000/year for a typical property.
• Hausgeld (Apartment Service Charges): For apartments only. Monthly charges covering building insurance, maintenance reserve, cleaning, management, and communal utilities. Typically EUR 2.50-4.00 per sqm/month (EUR 200-300/month for a 75 sqm apartment).

Annual holding costs for a house total approximately EUR 4,200. For an apartment, the Hausgeld replaces some individual items but adds its own costs, bringing the total to approximately EUR 5,000-7,000/year depending on the building.

Capital gains tax (Spekulationssteuer)

Germany’s capital gains tax on property — known as Spekulationssteuer — has one headline feature that every investor should know: after 10 years of ownership, the gain is fully exempt for private individuals.

Within the 10-year speculation period (Spekulationsfrist), gains are added to your taxable income and taxed at your personal income tax rate:

On top of the income tax rate, add Solidaritaetszuschlag (5.5% of income tax) and optionally Kirchensteuer (8-9% of income tax). The effective combined maximum rate can reach approximately 47.5%.

After 10 years: The gain is 100% exempt. No tax, no reporting requirement. This makes Germany one of the most attractive markets in Europe for long-term property investors.

Primary residence exemption: If you lived in the property for the year of sale and the two preceding calendar years, the gain is fully exempt — no need to wait 10 years.

Corporate ownership (GmbH): No speculation period benefit. Gains are taxed at the corporate tax rate of approximately 30% (Koerperschaftsteuer 15% + Solidaritaetszuschlag + Gewerbesteuer ~14%), regardless of holding period.

Three-property rule: If you sell more than three properties within five years, the tax office may reclassify you as a commercial property dealer (gewerblicher Grundstueckshandel), subjecting all gains to trade tax.

When selling, expect to pay an agent commission of ~3-3.57% (seller’s share including 19% MwSt) and approximately EUR 500 for mortgage cancellation (Grundschuldloeschung) if applicable. An Energieausweis (energy certificate) is mandatory when selling and costs EUR 50-300.

What does this mean in practice?

For a EUR 300,000 investment apartment in Berlin with a 20% deposit:

Upfront costs:

• Deposit: EUR 60,000
• Grunderwerbsteuer (6.0% — Berlin): EUR 18,000
• Notary fees (~1.5%): EUR 4,500
• Land registry (~0.5%): EUR 1,500
• Agent commission (~3.57%): EUR 10,710
• Mortgage registration (0.4% of EUR 240,000): EUR 960
• Mortgage notary (0.5% of EUR 240,000): EUR 1,200
• Property valuation: EUR 450
• Total cash needed: approximately EUR 97,320

Annual holding costs:

• Grundsteuer: EUR 800
• Building insurance: EUR 300
• Landlord liability insurance: EUR 100
• Maintenance reserve: EUR 3,000
• Hausgeld: EUR 3,000 (EUR 250/month)
• Total: EUR 7,200/year (approximately EUR 600/month)

Mortgage (EUR 240,000 at 3.5% over 25 years):

• Monthly payment: approximately EUR 1,200

To cover monthly costs, you would need rent of at least EUR 1,800 per month. Berlin rents have risen sharply in recent years, and a well-located apartment in this price range can achieve this, though rent control (Mietpreisbremse) limits what you can charge in many neighbourhoods.

The 10-year exemption fundamentally shapes the investment strategy. If you hold for a decade, you pay zero capital gains tax on what could be a substantial gain. With moderate appreciation of around 3%, a EUR 300,000 property could be worth approximately EUR 403,000 after 10 years — and the EUR 103,000 gain would be entirely tax-free. This makes Germany a market where buy-and-hold investors have a clear structural advantage.

Run the numbers for your property

Use our German property ROI calculator to model the full picture — Grunderwerbsteuer by state, notary fees, mortgage payments, rental income, and projected capital growth with the 10-year exemption. For a step-by-step overview of the buying process, read our guide to buying property in Germany.