Additional purchase costs (Additional costs calculator)

Closing costs are all additional expenses incurred when purchasing a property that go beyond the purchase price itself. They include real estate transfer tax, notary and land registry fees, as well as a real estate agent’s commission if applicable, and in Bavaria amount to between approximately 8.5% and 12% of the purchase price, depending on the specific circumstances. A closing costs calculator helps buyers calculate these items quickly and transparently so that no hidden costs are overlooked when planning financing.

The three main categories of closing costs

1. Real estate transfer tax: In Bavaria, it amounts to 3.5% of the notarized purchase price-one of the lowest rates in Germany. It is levied by the tax office and must be paid before the transfer of ownership.

2. Notary and land registry fees: Together, they account for approximately 1.5-2% of the purchase price. The notary certifies the purchase agreement and initiates the transfer of ownership; the land registry office charges fees for the registration. Notary and land registry fees are regulated by law (GNotKG) and are non-negotiable.

3. Real estate agent’s commission: Since 2020, the law on the sharing of real estate agent’s fees has been in effect: In Bavaria, the buyer pays a maximum of half the commission, typically 1.5-1.785% including VAT (based on a standard market total commission of 3.57%).

Calculating incidental purchase costs - Sample calculation

Purchase price: €350,000

• Bavarian real estate transfer tax (3.5%): €12,250
• Notary and land registry fees (approx. 1.8%): €6,300
• Buyer’s share of brokerage commission (1.785% incl. VAT): €6,248
• Total incidental purchase costs: approx. €24,800 (≈ 7.1%)

For a privately financed purchase without a real estate agent, the incidental costs drop to approx. 5.3%. This equity must be available in addition to the equity required for the purchase price - banks generally do not finance incidental costs.

Another example calculation with an agent for a multi-family home in Nuremberg:

• Purchase price: €800,000
• Real estate transfer tax (3.5%): €28,000
• Notary and land registry fees (approx. 1.6%): €12,800
• Buyer’s share of real estate agent’s commission (1.785%): €14,280
• Total incidental purchase costs: approx. €55,080 (≈ 6.9%)

Tax Treatment of Incidental Purchase Costs

For investors, many incidental purchase costs are tax-relevant: Notary and land registry fees attributable to the purchase, as well as the buyer’s share of the real estate agent’s commission, are added to the property’s acquisition cost and thus increase the depreciation base. Real estate transfer tax is also included in the acquisition cost. However, these costs are not immediately deductible as income-related expenses-they are spread over the depreciation period.

Important note: For investment properties, higher acquisition costs (including incidental costs) increase the depreciation base and thus the annual depreciation amounts. Careful documentation of all incidental purchase costs is essential for tax purposes.

Practical Tip for Property Owners in Nuremberg and Franconia

In Bavaria, buyers benefit from a comparatively low real estate transfer tax rate of 3.5%-in other federal states, it can be as high as 6.5%. Anyone buying in Nuremberg or Franconia should nevertheless set aside at least 10-12% of the purchase price as equity solely for incidental costs and unforeseen expenses. Especially for larger investment projects (multi-family homes, commercial properties), an additional liquidity reserve should be planned for initial maintenance measures or unforeseen repairs.

At my-home.de, we can provide you with a detailed breakdown of incidental costs for your specific purchase project upon request and recommend independent financial advisors in the region who can help you structure your financing.

Frequently Asked Questions

Can I include the purchase-related costs in the loan?

In principle, yes, if the bank approves the total loan (purchase price plus purchase-related costs). In practice, however, most banks require that the purchase-related costs be covered by equity, as the mortgage value of the property typically covers only the purchase price itself. Full financing including closing costs means 110% financing with significantly less favorable interest rates.

Are there ways to reduce closing costs?

When purchasing directly from the owner without a commission, the real estate agent’s commission is waived. The real estate transfer tax and notary fees, on the other hand, are set by law and non-negotiable. Contractual arrangements that artificially lower the notarized purchase price (e.g., by excluding fixtures and fittings) are permissible if the movable fixtures and fittings are actually valued separately-but under no circumstances for the purpose of tax evasion.

When must the incidental purchase costs be paid?

The real estate transfer tax is due within one month of the tax assessment notice being issued (approx. 4-8 weeks after notarization). Notary fees are paid upon invoicing. The real estate agent’s commission is due upon signing the contract, unless otherwise agreed in the brokerage agreement.

What happens if the purchase contract is subsequently rescinded?

Notary fees and land registry fees are generally due even if the purchase contract is not executed (e.g., if the municipality exercises a right of first refusal). Real estate transfer tax, however, is waived if the purchase contract is legally rescinded and the tax office is notified in a timely manner. Depending on the agreement, the real estate agent’s commission must be refunded in part or in full if the sale does not go through.

Do ancillary purchase costs need to be budgeted for from day one?

Yes-ancillary purchase costs are not incurred only upon moving in, but already during and after the notary appointment. The notary’s invoice typically arrives two to four weeks after notarization. The real estate transfer tax notice from the tax office usually follows four to eight weeks after notarization and is payable within one month. The real estate agent’s commission is agreed upon in the brokerage contract and is usually due upon signing the purchase agreement. Anyone who fails to plan for this liquidity and does not have the incidental costs immediately available risks incurring late payment interest from the tax office or default interest owed to the notary. For a property priced at 400,000 euros, the incidental purchase costs in Bavaria can quickly amount to 24,000 to 30,000 euros-an amount that must be immediately available in cash. We recommend never parking this amount in securities or fixed-term deposits with lock-in periods, but rather keeping it in an immediately accessible money market account.

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