Property transfer tax and fixtures: what may leave the purchase price
In Germany, property transfer tax (Grunderwerbsteuer) is the single largest item among the incidental purchase costs — and the only one you can legally influence through the way the purchase contract is drafted. The lever is movable fixtures: whatever is movable and stated separately does not belong in the tax base. This article shows what that rests on, where the line runs, and why the point has a second, often overlooked effect for landlords.
Why fixtures fall out of the tax base at all
The logic follows from three provisions that build on one another. First, the tax is not assessed on the value of the property but on the value of the consideration (§ 8(1) GrEStG). Second, in a purchase that consideration is “the purchase price including any other obligations assumed by the buyer” (§ 9(1) no. 1 GrEStG) — meaning the price paid for the land. Third, the Act does not define land in its own terms but refers back to civil law:
The decisive question is therefore not a tax question but one of the German Civil Code (BGB): does the item belong to the land under civil law, or not? Whatever does not belong to it cannot form part of the consideration for the land — and stays outside the tax base.
The dividing line: essential part or accessory
The BGB draws the line in two places. Accessories are “movable things which, without being parts of the main thing, are intended to serve the economic purpose of the main thing” (§ 97(1) BGB). An accessory is usually transferred along with the property, but it remains a legally separate object — and so it is not land.
The opposite side is governed by § 94(2) BGB: “The essential parts of a building include the things inserted for the construction of the building.” Anything installed in that sense forms part of the building — and unavoidably part of the tax base. Stating a separate price in the contract does not change that.
| Typically movable (an opportunity) | Typically part of the building (no lever) |
|---|---|
| Fitted kitchen with appliances, if it can be relocated | Heating system, windows, doors, screed |
| Furniture, fitted wardrobes without a fixed connection | Sanitary ware, permanently laid tiles |
| Awning, free-standing garden shed, garden furniture | A built masonry fireplace, a lift |
| A sauna or wood stove that simply stands in place | Solar panels, where permanently built in |
A guide, not a formula. The table describes the usual cases, not an automatic rule. Whether a particular fitted kitchen was “inserted for the construction of the building” depends on how it is actually installed — a bespoke kitchen integrated into the fabric of the building may be judged differently from a standard, relocatable one. In case of doubt the physical reality decides, not the label used in the contract.
What it is worth in figures
The statutory rate appears in § 11(1) GrEStG, still phrased in an archaic German legal expression for a percentage, and amounts to 3.5%. Far from everyone pays that rate, however, because the Basic Law grants the federal states a power of their own:
What this means in practice: the rate that applies to you follows from the law of your federal state, not from § 11 GrEStG. Check it before every calculation — the spread between the states is considerable.
A worked example using an assumed state rate of 6%:
| Item | Without a separate statement | With a separate statement |
|---|---|---|
| Total purchase price | €400,000 | €400,000 |
| of which fixtures (kitchen €12,000, garden furniture €4,000, awning €2,000) | – | €18,000 |
| Tax base | €400,000 | €382,000 |
| Tax at an assumed 6% | €24,000 | €22,920 |
| Saving | €1,080 | |
The saving is simply the value of the fixtures multiplied by the tax rate. It is a modest sum, but it is money that stays with you for nothing in return — and it falls due on the day of purchase, when liquidity is tightest anyway. How it fits into the overall calculation is covered in the article on calculating the cash flow of a property.
The second effect, often the bigger one for landlords
If you let the flat, the gain goes beyond the transfer tax. The amount taken out of the price does not disappear — it merely moves to a different tax shelf, and a much faster one.
Buried inside the total purchase price, the kitchen shares that price’s fate: the share attributable to the land cannot be depreciated at all, and the building share runs at “3% per year” (§ 7(4) EStG) for a residential building completed after 31 December 2022 — that is, over more than three decades. Stated separately, the fixtures become assets in their own right:
- Individual items up to €800 (net of VAT) are deductible in full in the year of acquisition — § 6(2) EStG, which § 9(1) EStG declares to apply “accordingly” to income from letting. From €250 upwards they belong in a continuously maintained register.
- More expensive items such as the fitted kitchen are written off evenly over their useful life under § 7(1) EStG — years rather than decades.
For a landlord the ranking therefore often reverses: the transfer tax saved is the smaller item, the accelerated deduction the larger one. Together they make the allocation of the purchase price one of the most consequential decisions of the whole transaction — see also splitting the purchase price between land and building.
The second-largest item among the incidental purchase costs follows rules of its own that have nothing to do with the purchase contract: whether and to what extent the estate agent commission falls on the buyer depends on the type of property and on the purpose of the acquisition — for a let apartment block the statutory equal split does not apply at all.
The downside almost nobody mentions
Taking fixtures out reduces not only the transfer tax but also the acquisition costs of the building. And that figure is exactly what the threshold for acquisition-related production costs hangs on: spending on repairs and modernisation within three years of purchase becomes production cost if it “exceeds 15% of the acquisition costs of the building, excluding VAT” (§ 6(1) no. 1a EStG). Lower the reference figure and the threshold falls with it.
| Assuming a 75% building share | Without a separate statement | With a separate statement |
|---|---|---|
| Acquisition costs of the building | €300,000 | €286,500 |
| Threshold for acquisition-related production costs | €45,000 | €42,975 |
| Headroom lost | €2,025 | |
If you plan an extensive refurbishment straight after the purchase and are close to the threshold anyway, weigh both effects against each other instead of looking only at the transfer tax. What exactly counts towards that threshold is explained in the article on the 15% rule for acquisition-related production costs.
What the tax office expects
Clarity matters more than optimism here: the law names no percentage and no flat rate for fixtures. Rules of thumb such as “10 to 15% of the purchase price” circulate online, but they appear in no statute. What counts is solely whether the value applied reflects what the items are actually worth in used condition.
- List items individually. A single line reading “fixtures: €20,000” is the weakest form imaginable. Better: each item with its age, condition and value.
- Use current value, not replacement cost. An eight-year-old kitchen is not a new kitchen. The seller’s original invoices or current second-hand prices are useful reference points.
- Keep the evidence. Invoices, photographs and proof that the items can be relocated belong in your purchase file — not only once the tax office asks.
- Think about the financing. Banks generally do not lend against fixtures the way they lend against the property. A high fixtures share can reduce the mortgageable value and worsen your financing terms.
Where it stops being clever. An inflated value for fixtures is not a grey area but an incorrect statement about facts relevant to taxation. § 370(1) AO makes precisely that a criminal offence where it results in tax being underpaid — and because the purchase contract is notarised and reported to the tax office, the transaction is visible from the outset. A realistic figure backed by evidence is not only safer, it also survives the follow-up question.
Keep purchase costs and renovation thresholds in view
RenoDiary works with your real figures per property: incidental purchase costs including the transfer tax for your federal state, the purchase price split, depreciation and the 15% threshold with the headroom you have left — before the first builder’s invoice arrives.
Try it for freeWhat the courts have decided
Where fittings end, and who owns the reserve fund, has been settled by the Federal Fiscal Court (Bundesfinanzhof, BFH) for two borderline cases — one confirms the lever described in this article, the other shows where it does not work.
BFH, decision of 3 June 2020 – II B 54/19
Acquiring accessories is not subject to real-estate transfer tax, and the consideration attributable to them is not part of the tax base. Whether an item counts as an accessory follows civil-law case law under § 97 BGB: it must be intended to serve the economic purpose of the property on a lasting basis, and establishing that is for the trial court. For landlords this confirms the lever of this article at the highest level: a fitted kitchen or an awning, itemised cleanly in the purchase contract, really does reduce the tax base — as long as it remains an accessory in civil-law terms.
BFH, judgment of 16 September 2020 – II R 49/17
The purchase price may not be reduced by the pro-rata maintenance reserve (Instandhaltungsrückstellung). The decided case concerned Teileigentum — commercial units and parking spaces — and the court places Teileigentum and residential condominium ownership under the same statutory concept of "property". The reserve stays, in civil-law terms, the assets of the owners' association, so no change of legal owner takes place at all — even where the contract puts a value on it. For a condominium buyer: unlike movable fittings, the reserve cannot be carved out of the purchase price, however similar it feels economically.
Frequently asked questions
Do the fixtures have to appear in the notarised contract?
The evidence is easiest to provide when the breakdown appears in the notarised contract itself — the tax office then receives it with the notification of sale in any case. A list drawn up afterwards has a considerably harder time, because it creates the impression that it was produced for the tax office in the first place.
Does this also apply to a let flat with a fitted kitchen?
Yes, and it is particularly worthwhile there: besides the transfer tax you gain the faster deduction under § 6(2) EStG or the shorter write-off under § 7(1) EStG. The kitchen remains your asset even though the tenant uses it.
Do fixtures also reduce the notary and land registry fees?
No. Those fees are based on the transaction value of the land deal, not on the property transfer tax base. The lever works for the transfer tax alone — and, for landlords, for depreciation.
What about solar panels on the roof?
That depends on the type of installation and cannot be answered across the board: a system integrated into the roof covering is close to being part of the building under § 94(2) BGB, whereas a mounted-on system is generally not. Because the tax treatment of the income also turns on this classification, it is a matter for professional advice — the article on solar panels on a rented building sets out the follow-on questions.
Sources
- § 2 GrEStG (definition of land) — Gesetze im Internet (retrieved on 24 August 2026)
- § 8 GrEStG (tax base) — Gesetze im Internet (retrieved on 24 August 2026)
- § 9 GrEStG (consideration) — Gesetze im Internet (retrieved on 24 August 2026)
- § 11 GrEStG (tax rate) — Gesetze im Internet (retrieved on 24 August 2026)
- Art. 105 Basic Law (states’ power over the rate) — Gesetze im Internet (retrieved on 24 August 2026)
- § 94 BGB (essential parts) — Gesetze im Internet (retrieved on 24 August 2026)
- § 97 BGB (accessories) — Gesetze im Internet (retrieved on 24 August 2026)
- § 6 EStG (low-value assets, 15% rule) — Gesetze im Internet (retrieved on 24 August 2026)
- § 7 EStG (depreciation) — Gesetze im Internet (retrieved on 24 August 2026)
- § 9 EStG (deductible expenses) — Gesetze im Internet (retrieved on 24 August 2026)
- § 370 AO (tax evasion) — Gesetze im Internet (retrieved on 24 August 2026)
- BFH, decision of 3 June 2020 – II B 54/19 (acquisition of accessories not subject to transfer tax) — Federal Fiscal Court (retrieved on 25 August 2026)
- BFH, judgment of 16 September 2020 – II R 49/17 (maintenance reserve does not reduce the consideration) — Federal Fiscal Court (retrieved on 25 August 2026)
This article provides general orientation and does not replace individual tax or legal advice within the meaning of § 3 StBerG. Whether a particular item is an accessory or part of the building, and whether the value applied is appropriate, are questions of the individual case — what matters is the actual situation and the assessment of a qualified professional.