Anyone buying a property in Bavaria in 2026 pays 3.5 percent real estate transfer tax – the lowest rate of all 16 federal states. No state is cheaper, and Bavaria has kept this rate unchanged since 1997. We explain why the Free State is so much cheaper when buying than, for example, North Rhine-Westphalia, and calculate the tax step by step using a specific purchase price as an example.
What is real estate transfer tax?
Real estate transfer tax is a one-time tax incurred when purchasing land or property. Its legal basis is the Real Estate Transfer Tax Act (GrEStG). The transaction becomes subject to tax upon conclusion of the notarized purchase agreement – not only when it is entered in the land register.
The tax base is the so-called consideration, which is generally the purchase price recorded in the deed. The state tax rate is applied to this amount. It is important to distinguish this from property tax: You pay real estate transfer tax once when acquiring the property, whereas property tax is paid continuously every year as long as you own the property. Real estate transfer tax is part of the ancillary purchase costs – together with notary and land register fees and any broker’s commission.
Why Bavaria is the cheapest at 3.5 percent
The rate of 3.5 percent is not a Bavarian special arrangement, but the nationwide standard rate under Section 11 GrEStG: “The tax amounts to 3.5 percent.” Until 2006, this rate applied uniformly throughout Germany.
The 2006 federalism reform changed this. Since then, the federal states have been allowed to set the real estate transfer tax rate themselves under Article 105 paragraph 2a of the Basic Law, and the revenue flows exclusively to the states. As a result, almost all states increased the rate to finance their budgets – in some cases up to 6.5 percent.
Bavaria is the only federal state that has never increased the rate. Even Saxony, which had long been level with Bavaria, raised its rate to 5.5 percent effective January 1, 2023. This means that in 2026 the Free State stands alone at the top among the cheapest states. For context, the range is as follows:
- Bavaria: 3.5 percent (unchanged since 1997)
- Baden-Württemberg, Lower Saxony, Rhineland-Palatinate, Saxony-Anhalt, Thuringia: 5.0 percent
- Hamburg, Bremen, Saxony: 5.5 percent
- Berlin, Hesse, Mecklenburg-Western Pomerania: 6.0 percent
- Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein: 6.5 percent
The Bavarian rate applies uniformly throughout the state – whether you buy in Munich, Nuremberg or a small rural municipality makes no difference. Unlike the trade tax multiplier, no municipality can impose its own surcharges.
How to calculate real estate transfer tax in Bavaria
The calculation is very simple: Purchase price × 3.5 percent = real estate transfer tax. For a purchase price of 500,000 euros, this results in:
500,000 euros × 3.5% = 17,500 euros real estate transfer tax
Further examples of typical purchase prices in Bavaria:
- 300,000 euros purchase price → 10,500 euros real estate transfer tax
- 500,000 euros purchase price → 17,500 euros real estate transfer tax
- 750,000 euros purchase price → 26,250 euros real estate transfer tax
- 1,000,000 euros purchase price → 35,000 euros real estate transfer tax
The state comparison shows how significant the low rate is. The same 500,000 euros costs 32,500 euros in real estate transfer tax in a state with a rate of 6.5 percent – 15,000 euros more than in Bavaria. This money remains available to Bavarian buyers as equity.
Deducting inventory from the purchase price
There is one legal possibility: Movable inventory is not subject to real estate transfer tax. If, for example, a fitted kitchen, sauna or awning sold with the property is listed separately in the purchase agreement, this amount reduces the tax base. With a purchase price of 500,000 euros and inventory separately stated at 15,000 euros, tax is payable only on 485,000 euros – that is 16,975 instead of 17,500 euros. The amounts must be realistic and individually specified in the agreement; the tax office will not recognize inflated valuations. Also note: Some banks do not finance the inventory portion.
Special case: new construction
If you purchase an undeveloped plot of land and simultaneously conclude a linked construction contract, the tax office may assume a “unified contractual arrangement” and include the construction costs in the tax base. Real estate transfer tax then applies not only to the land price but to the completed building.
Who pays the real estate transfer tax – and when?
Under Section 13 GrEStG, buyers and sellers are jointly liable for the tax (joint and several debtors). In practice, however, the purchase agreement almost always assigns the tax to the buyer. The process is as follows:
- The notary notarizes the purchase agreement and reports the sale to the tax office.
- The The tax office issues the real estate transfer tax assessment notice.
- The tax is due one month after notification of the assessment notice (Section 15 GrEStG).
- After payment, the tax office issues the certificate of clearance (Section 22 GrEStG).
- Only with this certificate may the buyer be entered in the land register – only then does ownership finally transfer.
Real estate transfer tax is therefore one of the first payments after the notary appointment and must be paid from equity. No registration without paid tax – so make sure to include the amount firmly in your financing plan.
When no real estate transfer tax is incurred
The law provides for several exceptions (Section 3 GrEStG):
- De minimis threshold: If the relevant value is 2,500 euros or less, no tax is incurred. This is a tax-free threshold, not a tax allowance – if it is exceeded, the entire amount is taxable.
- Inheritance and gifts: Acquisitions upon death and gifts of real estate are exempt from real estate transfer tax; inheritance and gift tax applies instead.
- Spouses and civil partners: If one spouse or civil partner purchases from the other, the tax does not apply.
- Relatives in the direct line: Transfers between parents and children (including stepchildren) are exempt.
- Divorce: The division of assets following a divorce is also tax-free.
Advantages and disadvantages for buyers in Bavaria
The low rate is a genuine location advantage, but it has limits:
- Advantage – lowest ancillary costs: No other federal state offers more favorable conditions when purchasing. The money saved strengthens your equity and reduces the financing requirement.
- Advantage – predictable and uniform: 3.5 percent applies throughout the Free State, with no municipal surcharges and stable for decades.
- Advantage for sellers: Low ancillary acquisition costs make Bavarian properties more attractive to buyers.
- Disadvantage – high absolute amounts: Bavaria has some of the highest purchase prices nationwide. 3.5 percent of a large sum remains a noticeable amount.
- Disadvantage – payable from equity: The tax cannot be financed with the property as collateral and becomes due soon after the purchase.
FAQ on real estate transfer tax in Bavaria
How high is the real estate transfer tax in Bavaria 2026?
It amounts to 3.5 percent of the purchase price. This is the lowest rate of all German states and has remained unchanged since 1997.
How do I calculate the real estate transfer tax?
Multiply the notarized purchase price by 3.5 percent. For a purchase price of 400,000 euros, this amounts to 14,000 euros.
Can I save on real estate transfer tax in Bavaria?
For a standard purchase, it cannot be avoided. However, you can list movable inventory sold with the property separately in the contract, thereby reducing the tax base. Statutory exemptions also apply to transfers within the family.
When do I have to pay the real estate transfer tax?
One month after notification of the tax assessment notice. You will usually receive the notice a few weeks after the notary appointment.
Is real estate transfer tax tax-deductible?
Not for a property you occupy yourself. For a rented property, it is considered an ancillary acquisition cost and is taken into account proportionally for tax purposes through depreciation of the building. Seek tax advice on this.
Is real estate transfer tax charged on gifts or inheritances?
No. Inheritances and gifts are exempt from real estate transfer tax. Instead, inheritance or gift tax may apply.
Conclusion: Bavaria remains the most affordable state for purchases
At 3.5 percent, Bavaria levies the lowest real estate transfer tax in Germany—a benefit that amounts to 15,000 euros on a purchase price of 500,000 euros compared with a state charging 6.5 percent. The calculation is simple, the rate applies uniformly throughout the state, and legal flexibility exists primarily for separately listed inventory. Include the tax as a fixed part of your ancillary purchase costs in your planning: It is due early and is a prerequisite for registration in the land register.