Understanding Purchase Costs (Kaufnebenkosten) in Germany

One of the biggest mistakes foreign buyers make in Germany is focusing solely on the property price. The additional purchase costs, known as 'Kaufnebenkosten', are significant and usually cannot be financed by the bank; they must be paid from your own pocket.

1. Property Transfer Tax (Grunderwerbsteuer)

This is the largest chunk of the extra costs. The rate depends entirely on the federal state (Bundesland) where the property is located. For example, in Bavaria it is 3.5%, while in Berlin, Hesse, and NRW it is as high as 6.0% or 6.5%.

2. Real Estate Agent Fees (Maklerprovision)

Historically, buyers paid the full agent fee. However, a new law introduced in late 2020 mandates that for residential properties, the seller must pay at least half of the commission. Typically, the total commission is around 7.14% (including VAT), meaning you will pay approximately 3.57%.

3. Notary and Land Registry

You should budget roughly 2.0% of the purchase price for the notary and the entry into the land register (Grundbuch). These fees are fixed by law based on the property value.