The real property tax burden is calculated by multiplying:
the assessed value of the real property
the real property tax rate
the municipal multiplier
The assessed real property value is determined by the tax authorities according to the German Assessment Code (Bewertungsgesetz). The German Assessment Code refers to historical property values that are usually significantly lower than current market value.
The tax rate varies between 0.26 percent and 1 percent depending on the Federal State (the real property is located at) and the use of the property.
Similar to the municipal multiplier applied in the trade tax case, the municipal multiplier applied to real property tax is stipulated by each municipality. Municipalities determine a municipal multiplier for both real property tax "A" and real property tax "B", with the rate for "B" usually being higher.
When domestic real estate is sold or changes owner, a one-time real property transfer tax (Grunderwerbssteuer) of the purchase price is levied if the purchase price or consideration exceeds EUR 2,500. Real property transfer tax is usually paid by the buyer. The tax rate varies from federal state to federal state. Please see the table below for more information.
Real Property Transfer Tax Rates in the Respective Federal States 2019
Baden-Württemberg, Bremen, Mecklenburg-Vorpommern, Niedersachsen, Rheinland-Pfalz, Saxony-Anhalt
Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein, Thuringia
Real property transfer tax also applies to a real property-owning partnership if 95 percent of the shareholders change within five years.