In Germany, as in any other country, you must pay taxes when buying, owning, selling real estate and receiving property as a gift or inheritance. Rental income is also taxed. Property taxes for Germans and Russians are completely identical and are levied according to the same rules and rates.

Tax when purchasing real estate in Germany

After purchasing real estate in Germany, you must pay tax on the transfer of ownership within a month. Only after this the buyer is officially registered in the Land Register as the new owner of the property.

Each German federal state sets its own tax rates, which range from 3.5 to 6.5%. The lowest rates are in Bavaria and Saxony, the highest in Schleswig-Holstein, North Rhine-Westphalia, Saarland and Thuringia.

When buying real estate in the border areas of Germany, you can make a choice in favor of one or another land, saving a significant amount. So, for example, buying a house for 400 thousand euros in Bavaria, you will have to pay 14 thousand euros, and in neighboring Thuringia – already 26 thousand euros.

Property tax in Germany for owners

Property tax in Germany is levied on property owners annually. The amount to be paid depends on the assessed value of the property, the tax rate and the increasing coefficient, which is independently established by municipalities. The tax rate depends on the type of housing (apartment or house) and varies from 0.26 to 1% depending on the territory. The increasing coefficient in some lands can reach 8 units.

Property taxes in Germany are relatively low, for example, per year an ordinary family living in an apartment spends about 200-300 euros to pay this tax, in a house – about 600 euros.

Currently, the assessed value of property, which serves as the basis for calculating the tax rate, is based on outdated data, and reforms are being carried out in Germany to make the tax calculation procedure more transparent and fair. From September 31, 2019, new rules will be introduced, but their content is still unknown.

Property tax in Germany on rental income

Rental income minus the costs of maintaining the property is subject to income tax. The tax rate is calculated on a progressive scale and depends on the amount of income received.

Rental income (EUR per year)
Tax rate (%).
less than 8,652
8 652 – 52 881
52 881 – 250 730 42
more than 250 730 45

Additionally, the lessor pays a solidarity surcharge, which is calculated as 5.5% of the income tax rate.

Tax on the sale of real estate in Germany

If the owner sells the property within 10 years of purchase, he must pay capital gains tax. The rates for this tax are calculated in the same way as for income tax (from 0 to 45%). The tax base is the difference between the profit from the sale, the costs of acquiring real estate and depreciation.

Tax on the sale of real estate in Germany is not paid if the owner has used the property as his permanent residence for the last three years, including the year of sale.

Real estate tax in Germany in case of gift and inheritance

Gift and inheritance taxes range from 7 to 50% and are calculated based on the market value of the property and the degree of relationship between the recipient and the donor or testator.

To calculate what tax you will have to pay on receiving real estate in Germany, you need to take into account a tax deduction depending on the degree of relationship with the donor. For spouses, its amount will be 500 thousand euros, for children and grandchildren – 400 thousand euros when inheriting and 200 thousand euros when donating, for parents and grandparents – 100 thousand euros, other relatives – 20 thousand euros. This deduction can only be applied once every ten years.

Gift and real estate transfer taxes are not paid if the donation is made between spouses and the property is used for common residence.

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