If you buy a vacant plot of land and have it built on, you must expect the tax office to charge land transfer tax not only on the land value, but also on the construction costs.

To this end, it examines whether the object of acquisition was the undeveloped property.

If you buy the plot and the new building from a single source, you will be asked to pay quite a lot.

If your new building costs 400,000.00 euros alone, for example, you will pay between 14,000.00 euros (3.5 %) and 26,000.00 euros (6.5 %) in tax on the construction costs, depending on the federal state!

Now the Federal Fiscal Court has ruled:

Fees for subsequent special requests when building a house also increase the real estate transfer tax if they are legally connected to the property purchase contract.

According to the court, such a connection can exist if

❗ the buyer is contractually obliged to bear additional costs for subsequent special requests and may not implement these himself or

❗ the purchase contract itself already provides for deviations from the construction work following a corresponding agreement.

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#Property transfer tax #Construction #Special requests #TTax tips #Property #New build #WSB