Anyone who buys a house or apartment in Lower Saxony pays 5.0 percent of the purchase price as real estate transfer tax – for a purchase price of 400,000 euros, that amounts to 20,000 euros. This makes the tax by far the largest individual item among the ancillary purchase costs and means it must be included in the financing from the outset. We explain how the tax rate is determined, how you can calculate the real estate transfer tax yourself, what share it represents of the total ancillary acquisition costs, and when it is exceptionally waived entirely.
What is real estate transfer tax?
Real estate transfer tax is a one-time tax incurred when ownership of a plot of land or property is transferred. It is generally triggered by the notarized purchase agreement – legally, by the acquisition transactions listed in Section 1 GrEStG. It should not be confused with the annually recurring property tax: You pay real estate transfer tax only once, namely when making the purchase.
Real estate transfer tax is a state tax. In Section 11 GrEStG, the federal government does specify a standard tax rate of 3.5 percent, but since the 2006 federalism reform, each federal state has been allowed to set its own rate. This is precisely why the rates differ considerably across Germany – and Lower Saxony, at 5.0 percent, is in the middle range.
How high is real estate transfer tax in Lower Saxony?
In Lower Saxony, the real estate transfer tax rate is 5.0 percent of the consideration and has applied at this level to all acquisition transactions since January 1, 2014. This is confirmed by the Lower Saxony State Tax Office. The state raised the rate in two steps: from the original 3.5 percent to 4.5 percent (2011), and finally to the current 5.0 percent. No further changes are planned for 2026.
By nationwide comparison, Lower Saxony is therefore relatively favorable. For context, some rates for 2026:
- Bavaria: 3.5 percent (lowest rate)
- Lower Saxony, Baden-Württemberg, Rhineland-Palatinate, Saxony-Anhalt, Thuringia: 5.0 percent
- Bremen, Hamburg, Saxony: 5.5 percent
- Berlin, Hesse, Mecklenburg-Western Pomerania: 6.0 percent
- Brandenburg, North Rhine-Westphalia, Schleswig-Holstein, Saarland: 6.5 percent (highest rate)
So it is worth looking across the state border: For the same house, you pay 6.5 instead of 5.0 percent in neighboring North Rhine-Westphalia or Schleswig-Holstein – for a purchase price of 400,000 euros, a difference of 6,000 euros. What matters is always the federal state in which the property is located, not your place of residence.
How to calculate real estate transfer tax
The calculation is straightforward. The assessment basis is the consideration, normally the agreed purchase price including the services assumed by the buyer (Section 9 GrEStG). Multiply this value by the tax rate of 5.0 percent; the result is rounded down to whole euros.
Real estate transfer tax = purchase price × 5.0%
Some examples for Lower Saxony:
- Purchase price 200,000 euros → 10,000 euros real estate transfer tax
- Purchase price 300,000 euros → 15,000 euros real estate transfer tax
- Purchase price 400,000 euros → 20,000 euros real estate transfer tax
- Purchase price 500,000 euros → 25,000 euros real estate transfer tax
- Purchase price 750,000 euros → 37,500 euros real estate transfer tax
A side note: Movable inventory purchased with the property – such as a fitted kitchen, high-quality furniture or a sauna – is not part of the land and may be listed separately in the purchase agreement. This amount reduces the assessment basis and therefore the tax. However, the stated values must be realistic; otherwise, the tax office may follow up.
What share does real estate transfer tax represent of the ancillary purchase costs?
When purchasing property, a whole range of ancillary costs arise in addition to the purchase price. In Lower Saxony, they typically break down as follows:
- Real estate transfer tax: 5.0 percent of the purchase price
- Notary fees: around 1.5 percent (uniform nationwide under the Court and Notary Costs Act)
- Land register costs: around 0.5 percent
- Broker’s commission: depending on the property, up to 3.57 percent for the buyer (including VAT), generally split between buyer and seller since December 2020 (Section 656c BGB)
This makes clear how significant real estate transfer tax is. A calculation example for a house priced at 400,000 euros without a broker:
- Real estate transfer tax (5.0%): 20,000 euros
- Notary and land register costs (around 2.0%): 8,000 euros
- Total ancillary purchase costs: 28,000 euros (7.0% of the purchase price)
In this calculation, real estate transfer tax alone accounts for around 71 percent of the ancillary costs – by far the largest item. When a broker is involved, the picture changes:
- Real estate transfer tax (5.0%): 20,000 euros
- Notary and land register costs (around 2.0%): 8,000 euros
- Broker commission (3.57%): 14,280 euros
- Total ancillary purchase costs: 42,280 euros (around 10.6% of the purchase price)
Even then, just under half of the ancillary costs – around 47 percent – are still attributable to real estate transfer tax. Anyone who saves the commission by buying commission-free via a metasearch engine such as TraumImmo does reduce the total ancillary costs noticeably, but this does not change the real estate transfer tax itself. Therefore, factor in the 5.0 percent as a fixed cost: banks generally do not finance the ancillary purchase costs; they must be paid from equity.
When is real estate transfer tax due?
The procedure is regulated by law and takes place largely automatically for you:
- Purchase contract: The tax arises upon notarization. The notary reports the transaction to the responsible tax office.
- Tax assessment notice: The tax office assesses the real estate transfer tax and sends the notice to the tax debtor.
- Payment: The tax is due one month after notification of the assessment notice (Section 15 GrEStG).
- Clearance certificate: After receipt of payment, the tax office issues the clearance certificate (Section 22 GrEStG) and forwards it to the notary.
- Land register entry: Only with this certificate may the land registry office register you as the new owner.
According to Section 13 GrEStG, the tax debtors are the buyer and seller jointly and severally. In practice, however, the purchase contract almost always stipulates that the buyer bears the real estate transfer tax – accordingly, the tax office initially addresses the assessment notice to the buyer.
When is no real estate transfer tax charged?
Not every transfer of ownership is taxed. Section 3 GrEStG lists several tax-free exceptions that also apply in Lower Saxony:
- De minimis threshold: If the consideration is less than 2,500 euros, no tax is due.
- Spouses and registered partners: A purchase from a spouse or registered partner is tax-free – including in the event of a division of assets after divorce.
- Relatives in the direct line: If parents sell to their children (or vice versa), no real estate transfer tax is due. Stepchildren as well as their spouses and life partners are treated equally.
- Inheritance and gifts: A property that you inherit or receive as a gift is not subject to real estate transfer tax (but may be subject to inheritance or gift tax).
Incidentally, a sale between siblings is not exempt – here, the relationship is collateral rather than in the direct line.
FAQ on real estate transfer tax in Lower Saxony
How much real estate transfer tax do I pay in Lower Saxony?
5.0 percent of the purchase price. For 350,000 euros, that is 17,500 euros; for 500,000 euros, 25,000 euros. The rate has remained unchanged since 2014 and therefore also applies in 2026.
Who pays the real estate transfer tax – buyer or seller?
Legally, both are jointly and severally liable. However, it is customary and usually stipulated accordingly in the purchase agreement that the buyer bears the tax alone.
Can I deduct the real estate transfer tax from my taxes?
Not for a property used personally. For a rented or commercially used property, the real estate transfer tax counts as an ancillary acquisition cost of the building and has a tax-reducing effect through depreciation (AfA).
Can the real estate transfer tax be legally reduced?
Yes, within limits: List movable inventory sold with the property, such as a fitted kitchen or furniture, separately in the contract and assign realistic values to it. Only the pure land and building price is taxed.
What happens if the real estate transfer tax is not paid?
The tax office will then not issue a certificate of clearance. Without it, the land registry office will not register a new owner – so the purchase cannot be completed.
Conclusion
There is no way around real estate transfer tax when buying property in Lower Saxony: 5.0 percent of the purchase price is due as a one-time payment, and at around half to two-thirds, it represents the largest component of the ancillary purchase costs. Because banks generally do not finance these costs, you should include the amount firmly in your equity capital from the outset. The main savings potential lies elsewhere – for example, in the broker’s commission if you buy without commission – as well as through properly itemizing movable inventory. Statutory exemptions also apply to transfers within the family and inheritances.