Closing costs

Additional purchase costs are all expenses incurred during a real estate purchase that exceed the agreed-upon purchase price-in particular, real estate transfer tax, notary and land registry fees, as well as any real estate agent’s commission. These are not a minor expense but a substantial amount: In Bavaria, they range from 5% to 12% of the purchase price, depending on the circumstances, and must generally be financed from equity. Anyone who underestimates them when planning their budget risks a financing gap or higher borrowing costs.

Overview of Cost Items

Real Estate Transfer Tax: In Bavaria, 3.5% of the purchase price-one of the lowest rates nationwide (other states: up to 6.5%). It is paid directly to the tax office; without a clearance certificate from the tax office, the transfer of ownership cannot take place.

Notary fees: The notary certifies the purchase agreement, handles the payment of the purchase price, and initiates the transfer of title in the land registry. Their fees are based on the Court and Notary Fees Act (GNotKG) and the purchase price; approximately 1.0-1.5% is standard.

Land registry fees: Approx. 0.3-0.5% of the purchase price for registering the new owner and the mortgage.

Broker’s commission: Since 2020, the broker’s commission has been capped by law and must be split equally between the buyer and seller; 1.785% each, including VAT, is standard in Bavaria.

Additional Purchase Costs in Financial Planning

Banks generally finance the purchase price, not the additional costs. Anyone contributing 20% of the purchase price as equity must also cover the additional purchase costs from their own funds. Rule of thumb: Plan for at least 25-30% of the purchase price as total equity. Some banks offer so-called “full financing” (100-110% of the purchase price) for borrowers with very good credit-but at significantly worse interest rates and with stricter creditworthiness requirements.

For investors, this means: For a purchase price of €400,000, up to €44,000 in closing costs (at 11%) and at least €80,000 in equity for the purchase price itself must be set aside-that is, approximately €124,000 in total equity for a property with 80% debt financing. Many first-time buyers overlook this figure.

Tax Considerations for Buyers and Landlords

For owner-occupiers, closing costs are generally not tax-deductible. For landlords, notary and land registry fees, as well as a pro-rata share of the real estate agent’s commission, are included in the property’s acquisition costs and increase the depreciation base. Real estate transfer tax is also part of the acquisition costs and is accounted for tax-wise through depreciation. It cannot be immediately deducted as business expenses.

Concrete example: A condominium is purchased for €250,000 (of which €200,000 is the building portion). Closing costs of €17,500 (7%) are allocated proportionally to the building value: approximately €14,000 increases the depreciation base. With a 2% depreciation rate on €214,000 (building + proportionate incidental costs), this results in an annual depreciation of €4,280 instead of €4,000-a small but lasting tax advantage.

Practical Tip for Property Owners in Nuremberg and Franconia

In Bavaria, the real estate transfer tax of 3.5% is low compared to the national average-this significantly reduces ancillary purchase costs. For a typical apartment purchase in Nuremberg priced at €280,000, ancillary costs amount to around €22,000-€28,000 (depending on the involvement of a real estate agent). At my-home.de, we’ll provide you with a detailed breakdown of the incidental costs for your desired property in advance, so you won’t face any unpleasant surprises when your financing is approved.

Especially important: In Nuremberg, purchase prices have risen significantly in recent years, which not only increases the purchase price but also the absolute incidental costs. For a property priced at €500,000 instead of €300,000, with the same ratio of ancillary costs, you’ll incur nearly €17,500 more-money that must be set aside as equity.

Frequently Asked Questions

What ancillary costs are involved when buying without an agent?

With a commission-free direct purchase, the real estate agent’s commission is waived. This leaves real estate transfer tax (3.5%), notary fees (approx. 1.0-1.5%), and land registry fees (approx. 0.3-0.5%)-together totaling approx. 4.8-5.5% of the purchase price.

Can the closing costs be negotiated?

Notary fees and real estate transfer tax are regulated by law and non-negotiable. Since the 2020 law, the real estate agent’s commission has been subject to the 50/50 split principle, but its absolute amount is negotiable within standard market ranges. For purchases without an agent, this cost is eliminated entirely.

When exactly are the incidental purchase costs due?

Notary fees are due upon the notary’s issuance of an invoice (shortly after notarization). Real estate transfer tax is due upon delivery of the tax assessment notice (approx. 4-8 weeks after notarization). The real estate agent’s commission is specified in the purchase agreement or brokerage contract, typically upon signing the contract.

How do the incidental purchase costs in Bavaria differ from those in other federal states?

With a 3.5% real estate transfer tax, Bavaria is the federal state with the lowest rate (as of 2025). By comparison: In Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein, and Thuringia, the rate is 6.5%. For a purchase price of €400,000, a buyer in Bavaria saves €12,000 in real estate transfer tax alone compared to these states. This is a location advantage for investors in Franconia that should not be underestimated.

Are there ways to reduce ancillary purchase costs?

The options are limited, but not nonexistent. During purchase price negotiations, it can be agreed to list certain included furnishings (kitchen, built-in cabinets, garden tools) separately in the purchase contract and exclude them from the real estate transfer tax base. This is permissible as long as the values are realistic and the purchase price is not artificially split to evade taxes-tax authorities scrutinize unusual breakdowns. In a direct purchase without a real estate agent, the agent’s commission is eliminated, reducing incidental costs by up to 3.57% of the purchase price. Additionally, notary and land registry fees are calculated based on the purchase price-those who buy at a time when the purchase price has been negotiated pay less than if the price were inflated. Early financial planning that includes all ancillary costs prevents unpleasant surprises shortly before the notarization.

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