Taxes on real estate in Germany

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Purchase The buyer of real estate in Germany pays tax on the purchase of real estate. Although it is called the Land Acquisition Tax (Grunderwerbsteuer), it is paid on the purchase of both houses and apartments. The tax rate ranges from 3.5% to 5% of the value of the property, depending on which federal state it is located in. Over the past one to two years, different lands have been raising the rate of this tax. So, in late 2011 - early 2012, Grunderwerbsteuer will rise to 5% in North Rhine-Westphalia, Schleswig-Holstein and Rhineland-Palatinate. Starting next year, the tax on the acquisition of real estate will increase by 1.5% almost everywhere - this, against the general background, will significantly increase the cost of registering real estate in ownership. Ownership The basic federal rate of annual property tax (Grundsteuer) in Germany is 0.35% of the assessed value (Einheitswert) of the property. However, there is a municipal coefficient, and as a result, owners pay from 0.98% to 2.84% of the appraised value of the property per year. In practice, the tax on a one-bedroom apartment in Berlin is around € 200 per year. In Germany, there is a tax write-off scheme based on the depreciation of a building (if the building is more than 40-50 years old). For old houses built in 1925 and later, taxes are deducted annually at 2% of the appraised value of the object, for houses older than 1924 - 2.5% of the appraised value. Renting Income from the rental of real estate in Germany is taxed at the same rate as other income. The tax is progressive and is calculated as follows: - annual income up to 8,004 euros: 0% for residents and 14% for foreign citizens; - income from 8,005 to 13,469 euros: 14% - 23.97%; - income from 13 470 to 52 881 euros: 23.97% - 42%; - income from 52,882 to 250,730 euros: 42%; - income over 250,730 euros: 45%. Lower rates are used for spouses than for unmarried people. In addition, there is “for solidarity” (the tax was introduced after the unification of Germany and goes to the development of the eastern “new” lands of Germany) - 5.5% of the calculated amount of income tax. The expenses for the maintenance and renovation of housing and depreciation deductions are deducted from the tax base. Rental income is exempt from VAT. If bank financing is attracted when buying a home, the tax burden is significantly reduced during the repayment of the loan. The annual corporate income tax is 15% plus a solidarity surcharge, for a total of 15.825% of profits. Trade tax (if the company deals exclusively with the management of its own property, no tax is charged) - about 15% depending on the federal state. The indicated tax values can be considered as indicative, since in Germany only a specialist can calculate taxes correctly - a tax advisor who is responsible for the correctness of calculations and works in close contact with clients. Sale, inheritance and donation Capital gains tax (the so-called speculative tax Spekulationssteuer) on the sale of real estate is not charged if it belonged to the owner within the last ten years or during the last two years served as the owner's place of permanent residence. Otherwise, tax on resale income is charged at the rates of income tax. The transfer of ownership on the basis of inheritance is taxed from 7% to 50% depending on the degree of relationship. In this case, a certain amount is deducted from their tax base. For the first degree of kinship (spouses, children, grandchildren, parents, grandparents) the rate is from 7% to 30%, the first 100,000 - 500,000 euros are not taxed. In the case of the second degree of kinship, the rate is from 15% to 43%, the first 20,000 euros are not taxed. In the case of the third degree of kinship, the rate is from 30% to 50%, 20,000 euros are not taxed.