Incidental costs

Additional Purchase Costs - Additional purchase costs refer to all expenses incurred when buying a property in addition to the actual purchase price. They are a key factor in financial planning, as they must generally be covered by equity and can amount to 10-15% of the purchase price. The most important incidental purchase costs include real estate transfer tax, notary and land registry fees, and the real estate agent’s commission.

Overview of Incidental Purchase Costs

The individual cost components in Bavaria and specifically in Nuremberg:

Cost Type	Amount (Bavaria)	Notes
Real estate transfer tax	3.5% of the purchase price	Lowest rate in Germany
Notary fees	approx. 1.0-1.5%	Notarization, transfer of title, creation of a land charge
Land registry fees	approx. 0.3-0.5%	Transfer of ownership, priority notice of transfer
Real estate agent’s commission	3.57% incl. VAT (buyer’s share)	For residential properties, max. 50% of the total commission
Total	approx. 8.4-9.1% of the purchase price	Barring special circumstances

Calculation example for a single-family home in Nuremberg (purchase price €550,000):

• Real estate transfer tax: €19,250
• Notary: approx. €6,000-7,000
• Land registry: approx. €1,800-2,500
• Real estate agent commission (buyer): €19,635
• Total incidental costs: approx. €46,685-48,385

Financing the incidental purchase costs

The incidental purchase costs must be given special consideration in financing planning:

• Equity contribution: Banks generally finance only the purchase price (lending value), not the incidental costs. The incidental costs must therefore be paid in full from equity.
• Total capital requirement: Purchase price + incidental costs = actual capital requirement. With a purchase price of €550,000 and incidental costs of approximately €48,000, a total of €598,000 in capital is required.
• Rule of thumb for equity: At least 20-25% of the purchase price as equity plus the incidental costs should be available.
• Exception: Some banks finance the incidental costs as well (“full financing”), but charge significantly higher interest rates and impose stricter credit requirements in return.

Tax Treatment of Incidental Acquisition Costs

For owner-occupied properties, incidental acquisition costs are not tax-deductible. For rental properties, however:

• Real estate transfer tax, notary fees, land registry costs: To be capitalized as incidental acquisition costs and claimed through depreciation (AfA)
• Broker’s commission: Also incidental acquisition costs for rental properties (subject to capitalization)
• Consequence: These costs do not immediately reduce the tax base but do so over the useful life (buildings: 50 years = 2% depreciation per year)

Differences Between Federal States: Bavaria Has the Advantage

Bavaria offers the lowest real estate transfer tax rate in Germany (3.5%), which represents a measurable locational advantage. By comparison: In Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein, and Thuringia, the real estate transfer tax is 6.5%-almost twice as much as in Bavaria. For a purchase price of 500,000 euros, this amounts to a difference of 15,000 euros in real estate transfer tax alone.

For buyers in border regions (e.g., near the Bavarian-Thuringian or Bavarian-Baden border), it is worth comparing the tax conditions when choosing a location. Within the Nuremberg metropolitan region, all buyers benefit from this tax advantage.

Practical Tip for Property Owners in Nuremberg and Franconia

In Bavaria, the real estate transfer tax is 3.5%, which is significantly lower than in most other federal states (highest: 6.5% in Schleswig-Holstein and Thuringia). This is a real locational advantage for real estate buyers in Nuremberg and the metropolitan region. We recommend always factoring in ancillary costs from the very beginning when planning your financing-many first-time homebuyers significantly underestimate this expense. We help you transparently outline all applicable costs before making a purchase decision.

Frequently Asked Questions

When do I have to pay the real estate transfer tax?

After the purchase agreement is signed, the tax office issues the real estate transfer tax assessment. The tax is generally due within one month of the assessment being delivered. Only after payment does the tax office issue the clearance certificate, which is required for the transfer of title in the land registry.

Can I negotiate the real estate agent’s commission?

The real estate agent’s commission is not legally fixed in Germany-it is negotiable. For residential properties, the Commission Sharing Act has been in effect since 2020: The agent may not charge the buyer more than half of the agreed-upon total commission. In the Nuremberg metropolitan region, a total commission of 7.14% (including VAT) is standard, meaning 3.57% for the buyer.

Are there incidental purchase costs even in the case of a gift?

In the case of pure gifts, real estate transfer tax does not apply (Section 3 GrEStG). However, gift tax (depending on the degree of kinship and value), notary fees, and land registry fees do apply. In the case of mixed gifts (e.g., transfer in exchange for assuming debt), real estate transfer tax may apply in some cases.

How far in advance should I budget for the incidental purchase costs?

The incidental purchase costs are due immediately upon closing the purchase-the real estate transfer tax within one month of the tax assessment being issued, and notary fees shortly after notarization. Anyone buying a house should therefore have the necessary equity for incidental costs available in liquid form before the notary appointment. A lack of liquidity for these incidental costs is a common reason that delays or jeopardizes the purchase process.

Incidental purchase costs are an often-underestimated financing factor-those who do not fully include them in their calculations from the outset risk liquidity shortfalls at the notary appointment or an incorrect equity ratio calculation. We recommend that buyers in the Nuremberg metropolitan area prepare a complete cost calculation, including all incidental costs, before the first property presentation meeting and coordinate this with the financing bank.

Incidental Purchase Costs for Multiple Transactions: Optimization Strategies

Anyone buying or selling multiple properties-for example, as part of a portfolio strategy-should view ancillary costs as a strategic factor. In the case of direct transfers within the family (gifts, inheritance), real estate transfer tax is waived under Section 3 of the Real Estate Transfer Tax Act (GrEStG) if the transfer is to a spouse, child, or parent. This can result in significant tax savings for high-value properties. In Bavaria, this results in approximately 17,500 euros in real estate transfer tax being waived for a property valued at 500,000 euros. However, notary fees and land registry fees still apply even in the case of gifts, as notarization is required.

In commercial real estate transactions and the purchase of company shares (share deal) rather than the direct acquisition of real estate (asset deal), real estate transfer tax regulations can be more complex. The so-called share deal privilege-under which no real estate transfer tax is due below certain ownership thresholds-was significantly restricted by the 2021 reform. We recommend that investors planning structured transactions seek tax advice at an early stage.

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