How high are the incidental purchase costs in Saxony?
When buying or selling a property, considerable incidental costs come on top of the actual purchase price — which on purchase increase the equity required and on sale reduce the actual net proceeds. With the calculator below, both sides can be worked through quickly, including an integrated speculation-tax check for the sale scenario.
Incidental Costs Calculator
Tax note: Non-binding guidance, without warranty – not a substitute for tax advice.
Incidental purchase costs broken down
The incidental purchase costs in Saxony are made up of four items. All are calculated as a percentage of the purchase price — and on purchase fall due before you have even experienced a handover of keys:
| Item | Rate in Saxony | On €300,000 |
|---|---|---|
| Real estate transfer tax | 5.5 % | €16,500 |
| Notary costs (incl. purchase contract) | approx. 1.5 % | €4,500 |
| Land-register costs (transfer of ownership) | approx. 0.5 % | €1,500 |
| Agent courtage (buyer's share) | 0–3.57 % | €0–10,710 |
On a purchase price of €300,000 with agent involvement, buyers must therefore reckon with a total investment of up to €333,210 — equivalent to roughly an 11 % surcharge on the purchase price. Without an agent, the incidental costs reduce to a good 7.5 %.
Important for equity planning: banks generally do not finance the incidental purchase costs. They must be covered entirely from your own funds. A realistic equity figure for a property purchase in Dresden therefore lies at a minimum of 20–25 % of the purchase price (20 % down payment plus approx. 7–10 % incidental costs).
Sale costs and speculation tax
On the seller's side the direct costs are manageable — the biggest uncertainty is the speculation tax, which falls away as soon as the 10-year holding period is met:
- Agent courtage (seller's share): depending on the agreement, 0–3.57 % of the sale price. The seller pays the agreed commission, at most the same amount as the buyer.
- Speculation tax: if sold within 10 years of the purchase, the disposal gain is taxed at the personal income tax rate — usually 25–45 %. The only exception: owner-occupation in the year of sale and the two preceding calendar years.
- Notary costs: on a sale, the main part of the notary costs falls away (the purchase contract is usually paid by the buyer). Expenses for cancellations in the land register or similar are borne by the seller.
The calculator above works out for the sale side both the agent costs and a speculation-tax estimate — and shows the resulting net proceeds.
The effect of incidental costs on the yield
For capital investors, incidental purchase costs are particularly critical: they lengthen the time to break-even and lower the return on equity, because the incidental costs are capitalised into the purchase price but do not contribute to the lettable living area.
Two rules of thumb for capital investors in Dresden:
- Without capital appreciation: with an average net rental yield of 4 %, it takes around 2.5 years on paper for incidental costs of 10 % to be amortised through rental income alone — assuming no financing costs.
- With financing: the leverage effect (use of borrowed capital) can significantly raise the return on equity, provided the rental income approximately covers the financing instalment. More on this in the return on equity calculator.
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