Property Taxes in Germany
In the whole world is property by law virtual entity that is owned by an individual. An owner of property has the right to consume, sell, mortgage, transfer, but also tax… In Germany are property taxes: real estate tax, tax on real estate, inheritance tax and gifts tax.
• Real estate tax
The amount of tax payable is therefore dependent on the nature and value of the property, while the personal circumstances of the property owner are almost always disregarded. The taxpayer is obliged to make quarterly payments on 15 February, 15 May, 15 August and 15 November. Tax rate is: from 2.6 to 3.5 per thousand for real property in the former federal area, from 5 to 10 per thousand for real property in the new landing, 6 per thousand for all agricultural and forestry undertakings.
• Tax on real estate
The tax is imposed on real estate that is located in Germany and is transferred to the local authority, in which the property is located. The tax is also imposed, when buying at least 95 % shares of a company owning real estate. The tax becomes due one month after the tax assessment. The tax basis rate is 3.5 %. By the law are exempting these operations, for instance: purchase of real estate by persons related in the direct line to the vendor, purchase of real estate of low value (not exceeding 2 500 EUR)…
• Inheritance and gifts tax
Inheritance tax and gifts tax are in Germany similar. The principle is similar in both cases. When either the person making the gift (or the testator or the recipient of the gift) the heir is a German resident, the tax applies also to assets that are overseas. When neither the person making the gift (the testator or the recipient of the gift) the heir is a German resident, the tax applies only to assets that are located in Germany. When tax is imposed in a foreign country, the tax paid overseas will be deducted from the tax payable in Germany. As general rule, recipients of gifts (inheritances) are divided into three groups:
o group 1 – a spouse, children
o group 2 – parents and grandchildren
o group 3 – all others
The tax rates vary according to the above groups and also depend on the value of the asset. The tax payable fluctuates between 7 % (group 1) and 50 % (group 3). There are certain exemptions that depend on the degree of family kinship.