October 11th, 2010 | Published in German Tax News
Following the example of three other federal states, Brandenburg is now planning to increase the real estate transfer tax rate from 3.5% to 5%.
As a result of the intended legislative project, Brandenburg is calculating an increase in its tax revenue of about 37.5m € due to the new tax rate, the main part of which would remain with the state department – 20% of the increase are to be deducted for municipal fiscal compensation.
The new tax rate is intended to come into effect on January 1st 2011. All transactions which are not closed before January 1st 2011 are subject to the increased real estate transfer tax rate.
The current real estate transfer tax rate is generally at 3.5%. Via an amendment to the German Grundgesetz, beginning on September 1st 2006, each federal state (as opposed to the federal government) was given authority to assess the real estate transfer tax rate. This authority has since then been used by three states:
Berlin increased the real estate transfer tax rate to 4.5%, (as of 01.01.2007)
Hamburg to 4.5% (as of 01.01.2009) and
Saxony-Anhalt to 4.5% (as of 01.03.2010).
Bremen is also planning an increase of the real estate transfer tax rate to 4.5% in 2011. Joining Bremen are Lower Saxony with 4.5% and Saarland with 4%. Schleswig-Holstein is planning the change in 2013, going for a 5% real estate transfer tax rate.