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Single-family homes in the Hanover region: A reduction or abolition of the real estate transfer tax would burden the state coffers

Photo: Julian Stratenschulte / dpa

Federal Finance Minister Christian Lindner would like to abolish the real estate transfer tax. Now the Federal Ministry of Finance, led by the FDP politician, is consulting with the state finance ministries at least a reform of the tax.

The reform is intended to allow the federal states to improve the private purchase of real estate for self-use – up to and including tax exemption. High construction costs and interest rates now make it "almost impossible for families to acquire property," Lindner tweeted. We should therefore give the federal states the legal option of waiving real estate transfer tax on owner-occupied real estate."

According to the »Frankfurter Allgemeine Zeitung« (»FAZ«), the current discussion draft provides for a great deal of leeway for the federal states in the private purchase of a house or condominium. The only condition would be that they would be used for their own residential purposes. According to this, the countries could, among other things, offer a reduced tax rate up to a tax waiver. Lindner had already turned to the federal states weeks ago with initial plans.

It should depend on the interest of the buyer

In the future, a change in the rules is also planned, with which the avoidance of the tax with the help of real estate companies is to be prevented, reported the "FAZ", citing the current draft.

Accordingly, this no longer provides for how many shares in a company are bought and how long they are held, but whether an individual buys all shares or a group acquires them "in concert". If other purchasers are only involved in the "serving interest", their shares should be attributed to the others.

The revenue from the real estate transfer tax, which currently amounts to around 17 billion euros, is due to the federal states. They can decide on the tax rate themselves. In Bavaria it is 3.5 percent, in the other federal states it is between 5 and 6.5 percent.

The owners' association Haus & Grund Hessen welcomed Lindner's initiative. For a reduction of the property tax or a waiver, the association has been pleading for a long time.