Certificate of Compliance

Certificate of No Objection - The Certificate of No Objection is a document issued by the relevant tax office confirming that the real estate transfer tax incurred during the purchase of the property has been paid in full or that there are no tax-related objections to the transfer of ownership. It is a mandatory requirement for the land registry office to enter the new owner in the land register.

Significance and Process in the Purchase

The certificate of no objection is a key document in the real estate purchase process. After the purchase agreement has been notarized, the notary sends a certified copy of the agreement to the relevant tax office. The tax office then issues a real estate transfer tax assessment to the buyer, specifying the amount of real estate transfer tax due. In Bavaria, the real estate transfer tax rate is currently 3.5 percent of the purchase price.

Once the buyer has paid the real estate transfer tax by the deadline, the tax office issues the clearance certificate and sends it directly to the notary. Only once this document is available can the notary apply for the transfer of ownership at the land registry office. Without the clearance certificate, the land registry office will refuse to register the new owner, even if all other requirements are met.

Experience shows that the entire process-from receipt of the tax assessment notice through payment to the issuance of the certificate-takes four to eight weeks. Delays may occur if the buyer fails to pay the tax on time or if the tax office requires longer processing times due to a heavy workload. The deadline for paying the real estate transfer tax is generally one month after delivery of the tax assessment notice.

Legal Basis and Exceptions

The legal basis for the clearance certificate is found in Section 22 of the Real Estate Transfer Tax Act (GrEStG). According to this provision, the land registry office may only make an entry identifying the purchaser as the owner if a certificate from the tax office is presented.

In certain cases, the clearance certificate may also be issued even if no real estate transfer tax is due, such as in transfers between spouses, in cases of inheritance, or if the purchase price is below the exemption threshold. In these cases, the tax office confirms that the acquisition transaction is tax-compliant, meaning no real estate transfer tax is owed.

The real estate transfer tax clearance certificate should not be confused with other certificates of the same name that exist in other areas of law-such as the clearance certificate in insolvency law or the health insurance clearance certificate for commercial tenders. In real estate purchases, this refers exclusively to the tax office certificate pursuant to Section 22 of the Real Estate Transfer Tax Act (GrEStG).

Timeline and Practical Implications for Buyers

For buyers, the clearance certificate is a critical factor in scheduling the transfer of ownership. The typical sequence is as follows: Notarization of the purchase agreement → Notary sends a copy to the tax office → Real estate transfer tax assessment is received by the buyer (approx. 2-4 weeks) → Buyer transfers the tax → Tax office issues the clearance certificate (approx. 2-4 weeks after receipt of payment) → Notary applies for transfer of ownership at the land registry → Registration (approx. 2-6 weeks).

In total, three to five months can elapse between notarization and the final transfer of ownership. Since many banks only disburse the full loan amount after the transfer of ownership has been completed, timely payment of the real estate transfer tax from your own funds is crucial for a smooth process.

Practical Tip for Nuremberg and the Metropolitan Region

In Nuremberg, the Nuremberg-South Tax Office is responsible for real estate transfer tax and thus for issuing the clearance certificate. Processing times vary depending on the season and workload, but in practice they are usually four to six weeks after payment of the tax.

We recommend that buyers in the Nuremberg metropolitan area review the real estate transfer tax assessment immediately upon receipt and transfer the tax promptly. Any delay in payment postpones the issuance of the clearance certificate and, consequently, the entire transfer of ownership. Anyone using financing should ensure that the real estate transfer tax can be paid from their own funds, as banks generally do not co-finance this amount. Be sure to set aside the necessary funds for the real estate transfer tax, notary fees, and land registry costs-totaling approximately 4-6% of the purchase price-as part of your equity.

Frequently Asked Questions About the Clearance Certificate

Who applies for the clearance certificate?

The buyer does not have to apply for the clearance certificate themselves. The notary handles communication with the tax office, and the certificate is automatically issued by the tax office after payment of the real estate transfer tax and sent to the notary. The buyer simply needs to pay the tax assessment on time.

What happens if the real estate transfer tax is not paid?

If the real estate transfer tax is not paid on time, the tax office will not issue a clearance certificate. The transfer of ownership in the land registry is then blocked, and the buyer will not be registered as the owner despite the notarized purchase agreement. In addition, late payment penalties of one percent per month or part thereof will accrue on the outstanding amount. In the worst-case scenario, the purchase agreement may be contested by the other party if the delayed transfer violates contractual deadlines.

How long is the clearance certificate valid?

The clearance certificate has no time limit. It applies to a specific purchase transaction and remains valid until the transfer of ownership is completed in the land registry. However, the tax office may revoke the certificate if it is subsequently determined that the tax was assessed too low or the payment was not made properly.

What happens if the transfer of ownership takes longer than expected?

Several weeks may pass between the issuance of the clearance certificate and the actual entry in the land register-depending on the workload of the land registry office at the Nuremberg Local Court. During periods of high transaction volume (e.g., year-end, when many buyers want to close the deal within the current tax year), processing times of four to eight weeks at the land registry office are not uncommon. Buyers who depend on a swift transfer of ownership for their move-in or financing should ask the notary to treat the submission to the land registry office as a priority. A preliminary notice of conveyance (which is usually entered shortly after the notarial certification) protects the buyer during this interim phase from the seller’s disposal of the property, but does not confer full ownership.

Real Estate Transfer Tax Exemptions and Their Impact on the Certificate

In certain cases, no real estate transfer tax is due upon the purchase of property, and the tax office nevertheless issues a clearance certificate-stating that there are no tax objections to the transfer of ownership. This applies, for example, to transfers between spouses and registered partners (Section 3 No. 4 GrEStG), to gifts and inheritances to certain first-degree relatives (Section 3 No. 2 GrEStG), and to property transfers in the context of conversions under the Conversion Act (Section 6a GrEStG). Even in these cases, the notary must apply for the transfer at the land registry office and submit the clearance certificate-even if no tax is due. The process then proceeds more quickly, as there is no need to wait for tax payment, but the certificate remains indispensable as a procedural document.

Back to the Real Estate Glossary.