Buyer of new property – pay transfer tax and file your return
When you buy a new piece of property you buy a new home, parking space, storage room or similar from a developer during the construction stage. In practice, you buy shares in a housing or real estate company, entitling you to the management of a flat in a block of flats, or a terrace house apartment.
You must calculate the amount of transfer tax yourself and pay it.
Exemptions from transfer tax may apply if you are a first-time homebuyer. However, even in that case, you must file the return.If a new piece of property bought during the construction stage is sold before ownership is transferred, the sale usually proceeds under a transfer agreement.
Calculate the tax
Transfer tax is 2% of the price (including any other compensation) and of the appropriate amount of any housing company loan.
The debt-free price consists of the sales price and possible company loan.
In other words, you pay tax on the debt-free price even if you paid off your part of the company loan at the time of the sale.
You can use the transfer tax calculator to help with your calculations.
Example: Sarah buys shares in a housing company for EUR 120,000. The company loan related to the shares is EUR 160,000. The debt-free price on the ‘For sale’ advertisement is EUR 280,000. The transfer tax is calculated on the basis of EUR 280,000 and is 2% x EUR 280,000 = EUR 5,600. It makes no difference whether Sarah pays off her part of the company loan when buying the flat or gradually as part of her maintenance charge.
Pay the tax
Pay the tax within 2 months from the date when ownership was transferred to you. Do this even if you have used a real estate agent.
Send the notification to the property manager
To have your name entered in the list of shareholders, show the property manager one of the following:
- a printout of your electronic return, complete with the acknowledgement of receipt by the Tax Administration
- your processed (stamped) paper return.
Ask the property manager about any other documentation needed for having your name entered in the list of shareholders.
Transfer of ownership is specified in the deed of sale. In new property, ownership is usually transferred when the building has been completed and you have paid the sales price in full.
Did you buy a parking space when you bought your home?
If additional property such as parking or storage facilities are part of the contract, you must remember to pay transfer tax and file the return for that as well.
If the contract contains a specification of the price of the parking (or other) space, fill in the price information in your transfer tax return.