Anyone who buys a house has to pay land transfer tax for the purchase of the land and the building. Every year, the federal states raise the real estate transfer tax, which resulted in additional revenue of 15.8 billion euros in Germany in 2019. This represents a 12.1 percent increase in the real estate transfer tax compared to the previous year. This development is causing displeasure in the real estate industry and in the housing sector. The increase in the real estate transfer tax also means an increase in ancillary cost payments, which makes housing increasingly expensive.
The Federal Association of Free Real Estate and Housing Companies (BFW) also criticizes the increase in the real estate transfer tax and demands that the federal states stop the ongoing increase. Because since 2010, according to BFW, the revenue from the real estate transfer tax in Germany has tripled. The biggest increase has been in Berlin. Here, the real estate transfer tax has increased by 37 percent since 2018. According to BFW, this is in discrepancy with the introduction of a rent cap in Berlin.
The BFW also sees little point in the building subsidy if the real estate transfer tax remains as high as it is, or is likely to rise even further. The high real estate transfer tax affects above all the middle class, which can hardly finance the purchase or construction of a home. Because additionally to the purchase price and the high land acquisition tax still notary costs and broker fees come in addition, but the purchase additional expenses cannot be financed over a credit. Therefore also the BFW demands the introduction of an exempt amount of the land tax for first buyers. This was announced in the coalition agreement, but has not yet been examined by the federal government.
Source: BFW
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