On January 1, 2023, the Free State of Saxony increased the real estate transfer tax from 3.5 to 5.5 percent – a two-percentage-point surcharge that makes every property purchase noticeably more expensive. For a purchase price of 300,000 euros, buyers have since paid 16,500 instead of 10,500 euros, meaning 6,000 euros more. We explain how the tax is calculated, why Saxony increased the rate, and what the higher rate specifically means for buyers in Leipzig and Dresden.
What is real estate transfer tax – and why did it rise to 5.5% in Saxony?
Real estate transfer tax is a one-time tax incurred when purchasing a plot of land or property. It is part of the ancillary purchase costs and becomes due as soon as a purchase agreement for a property located in Saxony is notarized.
Under federal law, the standard tax rate is 3.5 percent (Section 11 GrEStG). Since the federalism reform of 2006, the states have been permitted to set their own rates; the Basic Law expressly grants them “the power to determine the tax rate for real estate transfer tax” (Art. 105 para. 2a GG). Saxony made use of this right.
The legal basis is the Saxon Real Estate Transfer Tax Rate Act, which was passed by the state parliament as part of the 2023/2024 Budget Accompanying Act. It states: “The tax rate for real estate transfer tax for legal transactions relating to plots of land located in the Free State of Saxony is 5.5 percent.” The rate applies to all legal transactions completed after December 31, 2022 (SächsGrEStSatzG). The increase was intended to finance the state budget.
Until the end of 2022, Saxony, at 3.5 percent, was at the lower end of the German states together with Bavaria. Since the increase, Bavaria has been the only state with the low standard rate, while Saxony, at 5.5 percent, is in the upper middle range – other states’ highest rates reach 6.5 percent.
How to calculate real estate transfer tax in Saxony
The assessment basis is generally the consideration, meaning the purchase price agreed in the purchase agreement. The calculation is simple:
Purchase price × 5.5% = real estate transfer tax
A few typical examples show how quickly the amount adds up:
- 200,000 euros Purchase price: 11,000 euros real estate transfer tax
- 250,000 euros purchase price: 13,750 euros real estate transfer tax
- 300,000 euros purchase price: 16,500 euros real estate transfer tax
- 400,000 euros purchase price: 22,000 euros real estate transfer tax
- 500,000 euros purchase price: 27,500 euros real estate transfer tax
As a rule of thumb: For every 100,000 euros of purchase price, 5,500 euros in real estate transfer tax is due. Before 2023, it was 3,500 euros – the difference of two percentage points therefore amounts to exactly 2,000 euros per 100,000 euros.
What the higher rate means for buyers in Leipzig and Dresden
Particularly in the metropolitan areas of Leipzig and Dresden, where purchase prices have risen over the years, the increase has a significant impact. A condominium costing 300,000 euros incurs 16,500 euros in real estate transfer tax alone; a detached house costing 500,000 euros amounts to 27,500 euros. Compared with the old rate, that is 6,000 and 10,000 euros more, respectively.
The key point is: Real estate transfer tax is one of the ancillary purchase costs that banks generally do not finance. You therefore have to raise the amount from your own funds. Anyone planning their budget should factor in the higher rate from the outset – otherwise, they may ultimately lack the necessary equity for financing approval.
In four steps: from notarization to registration in the land register
Step 1: Notarization
The purchase agreement is notarized. The real estate transfer tax only arises with this legal transaction.
Step 2: Notification to the tax office
The notary is legally required to notify the responsible tax office of the purchase. You do not have to do anything yourself.
Step 3: Tax assessment and payment
The tax office assesses the tax and sends the real estate transfer tax assessment notice. The tax is due one month after notification of the assessment notice (§ 15 GrEStG). The buyer, who is liable for payment under the agreement, transfers the amount to the tax office.
Step 4: Clearance certificate and registration
Once the tax has been paid, the tax office issues the clearance certificate. Only then may the land registry office register the change of ownership. Payment of the real estate transfer tax is therefore the prerequisite for you to appear as the owner in the land register at all.
What are the total costs of buying property in Saxony?
Real estate transfer tax is the largest, but not the only ancillary cost item. When buying in Saxony with the following items:
- Real estate transfer tax: 5.5 percent of the purchase price
- Notary and land registry costs: together usually around 1.5 to 2 percent
- Broker’s commission (if a broker is involved): often around 3.57 percent including VAT per party, generally split equally since 2020
In total, buyers should roughly budget 8 to 12 percent of the purchase price for ancillary purchase costs – a significant amount that must be financed from their own funds in addition to the actual purchase price.
Can real estate transfer tax be reduced?
The tax cannot be completely avoided in a conventional purchase. However, there are several legal approaches:
- Separately itemize movable inventory: Items sold along with the property, such as a fitted kitchen, awning or sauna, are not part of the land. If they are listed separately in the purchase agreement at a realistic value, the tax base is reduced accordingly. The value must be appropriate and should remain verifiable.
- Sales between close relatives: If spouses, registered civil partners or relatives in the direct line – such as parents and children – acquire the property, the transaction is exempt from real estate transfer tax (Section 3 GrEStG).
- Observe the exemption threshold: If the relevant value does not exceed 2,500 euros, no tax is charged. In practice, this threshold is relevant only for acquisitions of very low value.
Incidentally, the maintenance reserve of a condominium can no longer be deducted: According to current case law, it does not reduce the tax base.
FAQ on real estate transfer tax in Saxony
How high is real estate transfer tax in Saxony in 2026?
The rate is 5.5 percent of the purchase price and applies uniformly throughout the Free State. No changes have been announced for 2026.
Who pays the real estate transfer tax – buyer or seller?
Legally, both contracting parties are liable for the tax as joint and several debtors (Section 13 GrEStG). In practice, the purchase agreement assigns payment to the buyer. However, if the buyer does not pay, the tax office may turn to the seller.
When do I have to pay the real estate transfer tax?
The amount is due one month after notification of the tax assessment notice. The tax office sends the notice a few weeks after notarization.
Can I deduct the real estate transfer tax from my taxes?
For a self not used property. For a rented or commercially used property, real estate transfer tax is considered an ancillary acquisition cost and can be claimed for tax purposes proportionally through depreciation of the building (AfA).
Why has real estate transfer tax become so high in Saxony?
The Free State increased the rate from 3.5 to 5.5 percent on January 1, 2023, in order to generate additional revenue for the state budget. It was the largest single increase by a federal state since the 2006 federalism reform.
Conclusion: Plan for the higher rate early
Since 2023, Saxony, with its 5.5 percent rate, is no longer among the most affordable federal states. For buyers in Leipzig, Dresden, and the rest of the Free State, this means several thousand euros in additional ancillary costs, which must be covered from equity. Anyone planning a purchase should include the real estate transfer tax in the financing from the outset, clearly itemize any inventory sold with the property in the contract, and – where possible – make use of the exemption for close relatives. This will help you keep track of the total costs and avoid unpleasant surprises at the notary appointment.