One of the big reasons as to why property ownership is so low in Germany? The fees.

Depending on where you buy your own piece of paradise – you could be on the hook for taxes and fees that add up to over 10 percent of the purchase price! It’s a figure that’s high enough to make some wonder if the investment is worth it – and often used to explain why figures on German home ownership, at around 50 percent – are some of the lowest in Europe.

READ ALSO: Why is home ownership in Germany so low?

Land transfer tax

When you sign a contract to buy property in Germany, you’ll get a letter soon after from your local tax office – telling you how much land transfer tax you have to pay. Such a tax triggers whenever property ownership changes hands in Germany and needs to be paid by the new owner.

It’s calculated based on property value – most often the agreed purchase price – and varies depending on the federal state where the property is located.

The lowest transfer taxes are found in Bavaria – whose 3.5 percent rate is significantly lower than any other Bundesland. Five percent rates apply in Saxony-Anhalt, Mecklenburg-West Pomerania, Rhineland-Palatinate, Bremen, Lower Saxony, and Baden-Württemberg. 

Hamburg and Saxony follow with 5.5 percent rates, whereas Berlin and Hesse start going to the high end of tax rates at six percent.

At the highest end with 6.5 percent rates – lie North Rhine-Westphalia, Brandenburg, Saarland, Schleswig-Holstein, and Thuringia.

You won’t be able to add your name to the land registry – or Grundbuch – until you pay your tax.

READ ALSO: Why property prices in Germany are likely to rise this year

Real estate agent fee

In most German states, you’ll also have to pay your estate agent a commission amounting to about 3.57 percent of the property purchase price.

There are four federal states where this fee is lower though – and even a slightly lower percentage could make a big difference given the amounts involved. Hamburg and Mecklenburg-West Pomerania have commission fees of 3.18 and 3.08 percent, respectively.

At 2.98 percent, the lowest real estate commission fees are found in Bremen and Hesse.

These commission fees are also a reason why it may be an attractive option to buy a newer build property directly from a real estate developer – as you won’t pay any commission if you purchase from the developer directly. Private selling or buying foreclosed properties at a court auction also allows you to avoid this fee entirely.

If buying from a developer though, you may have to wait months or years to be able to actually move in though, as the places are often sold while still under construction.

EXPLAINED: What you need to know about buying property in Germany

Notary fee

No matter where you buy property in Germany, a notary must read out the contract in front of both parties.

This can be tedious and take hours – but the idea is to allow both parties the chance to ask questions on the terms of a neutral party.

Unfortunately, you’ll pay for the privilege and there’s no avoiding it. Notary fees are about 1.5-2 percent of the purchase price around Germany in most cases. Some shopping around might help you find a notary who charges the lower end at 1.5 percent.

If you’re not comfortable with legal German, you’re allowed to bring an accredited translator with you to the reading. This is, of course, at your own cost as well.

READ ALSO: Is it a good time to buy a home in Germany?