Real estate transfer tax

Real estate transfer tax is a legal transaction tax. It is levied on legal transactions involving domestic real estate insofar as they are aimed at acquiring ownership of the real estate or a position similar to ownership. In particular, purchase agreements and other legal transactions that establish a claim to the transfer of ownership of a domestic property are subject to this tax. However, numerous other legal transactions are also covered, such as the transfer of ownership in expropriation proceedings, the highest bid in compulsory auction proceedings, the direct or indirect change in the shareholder structure of a partnership or corporation through the transfer of at least 90 percent of the shares in the company's assets to new shareholders, the acquisition of the power of realization, certain conversion processes and the direct or indirect consolidation of at least 90 percent of the shares in a land-owning company in one hand.

As a rule, the persons involved in the purchase transaction are liable for the tax, e.g. the purchaser and seller of the real estate. They may contractually transfer the burden of payment to only one of the parties involved.

Certain acquisition transactions are exempt from tax, e.g.

• the acquisition of real estate belonging to the estate by co-heirs for the purpose of dividing the estate
• the acquisition of real property by the spouse of the transferor The same applies to registered civil partnerships
• acquisition of real estate by persons related to the transferor in a direct line (including stepchildren and their spouses)
• the acquisition of a low-value property (exemption limit of €2,500)

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The tax rate in Bremen is 5% for acquisitions realized before July 1, 2025. The tax rate is 5.5% for acquisition transactions realized from 1 July 2025. As a rule, real estate transfer tax is calculated on the consideration, which is defined very precisely and comprehensively by law. The consideration includes, in particular, any payment made by the purchaser to the seller or another person for the acquisition of the property. This also includes, for example, benefits granted to the transferor by third parties in return for transferring the property to the transferee.

In some special cases, e.g. if there is no consideration, in the case of conversions or contributions, the tax is calculated on the property value (§ 151 para. 1 no. 1 in conjunction with § 157 para. 1-3 of the Valuation Act).

All transactions subject to real estate transfer tax must be reported to the relevant tax office. This office determines the real estate transfer tax by means of a written tax assessment notice. Once the tax has been paid, the tax office issues a so-called clearance certificate, without which the purchaser of a property may not, as a rule, be entered in the land register.

The real estate transfer tax is levied by the federal states, which are also entitled to the revenue. The Länder may transfer the tax revenue in whole or in part to the municipalities and associations of municipalities.