1. Background
The legislator has decided to exempt the purchase or construction of a residential property to satisfy the urgent housing needs of the purchaser (buyer). This measure is intended to support the purchase of residential property for personal use.
Until now, the buyer of a residential property paid a fee of 1.1% of the purchase price for the entry of the ownership right in the land register and a fee of 1.2% of the pledge amount for the entry of a lien.
In future, entries in the land register for the acquisition of ownership or a building right to a property and the entry of liens for the collateralisation of loans are to be exempt from these fees.
2. Requirements for exemption from fees
The following requirements must be met for exemption from fees:
The registration is based on a legal transaction for consideration concluded after 31 March 2024.
The application for registration is submitted to the land registry court between 1 July 2024 and 30 June 2026.
The property serves to satisfy an urgent housing need.
At least 90% of the amount secured by the lien must be used to purchase or renovate the property.
The exemption from fees is actively utilised.
3. Limitation
The exemption from fees is limited to an assessment basis of € 500,000. The fee must continue to be paid for the portion exceeding this amount. If the assessment basis is more than € 2 million from the outset ("luxury property"), there is no exemption from fees.
Inherited or donated properties are not covered by this fee exemption.
4. Proof
In order to prove the urgent need for housing, the land register court must be provided with
confirmation of the main residence registration at the property address and
confirmation that the previous residential rights have been relinquished.
This proof must be submitted
at the same time as the land register application if the residence has already been occupied,
otherwise within three months of handover or completion,
at the latest within five years of the entry in the land register.
The fact that the loan, which is collateralised by the lien, was taken out for the acquisition or creation of living space must be proven by a confirmation from the bank.
5. Subsequent discontinuation of the exemption
The exemption from fees is subsequently cancelled if, within 5 years of the handover or completion of the residence, either
the right of ownership of this residence is relinquished or
the urgent need for accommodation ceases to exist.
In these cases, the fee is prescribed retrospectively. The land registry court or the tax office must be notified of the cessation within one month.
6. conclusion
From 1 April 2024, there will be no land register fees for the registration of ownership rights and liens for property purchases made to satisfy urgent housing needs, provided the purchase agreement was concluded on or after 1 April 2024 and the application for registration is received by the land register court from 1 July 2024 at the earliest.
The fee concession applies (for the time being) until 01.07.2026. However, the provisions are also applicable thereafter if the land register application is received by the court by 01.07.2026. This means that
the entry in the land register can also be made after 1 July 2026 and
proof of moving into the property for the fee exemption can still be provided up to five years after this entry.
If proof of residency is not provided during this period, the fee may still be due retrospectively. From the current perspective, this period of exemption from fees will therefore be completed by 1 July 2031. If residence is only taken up towards the end of this period, the fee may still be payable retrospectively if the residence is given up again within a further five years.
When purchasing a property that is fully financed by a loan from a third party, a registration fee totalling 2.3% of the purchase price has been charged to date. Therefore, if the buyer fulfils the necessary requirements, there is considerable financial relief when buying a home.