Real Estate Purchase

Real Estate Purchase
Formation of the Purchase Agreement
- Legal Validity of a Purchase Offer
Execution of the Real Estate Purchase through Trusteeship
Taxes and Fees for Real Estate Purchases
Encumbrance Clearance
Land Registry Entry and Transfer of Ownership
Your Benefits with Legal Assistance
Frequently Asked Questions – FAQ

Real Estate Purchase

When acquiring a property, various legal areas intertwine, including civil law, land registry law, and tax law. Whether private or commercial: Before purchasing, a thorough examination of the object of purchase should be carried out to identify and exclude risks early on.

Real estate purchase is the acquisition of land or property with transfer of ownership through land registry entry.

Secure Real Estate Purchase: Legal advice on purchase agreements, taxes, land registry, and trusteeship for a worry-free property acquisition.

Formation of the Purchase Agreement

Legal Validity of a Purchase Offer

A purchase agreement for a property is concluded as soon as the buyer and seller agree on the purchase price and the object of purchase. The acceptance of a purchase offer by the seller and its signing by the prospective buyer already lead to a legally binding contract. Therefore, a purchase offer should contain all essential contractual components, such as warranty, liabilities, encumbrance clearance, and handover date, to avoid later disputes.

Execution of the Real Estate Purchase through Trusteeship

Due to the underlying principle of simultaneous performance in civil law, a simultaneous handover of the object of purchase and the purchase price is not possible, as ownership of a property only transfers upon land registry entry. Therefore, a trusteeship is often used to secure the contracting parties.

Taxes and Fees for Real Estate Purchases

Real Estate Transfer Tax

The real estate transfer tax arises upon the legally valid conclusion of the contract and is generally calculated at 3.5% of the purchase price or the land value, if the latter is higher. For gratuitous acquisitions, a graduated rate applies.

Real Estate Income Tax

The real estate income tax applies to profits from remunerated sales of private properties and amounts to 30% of the sales profit. Exceptions exist, for example, for primary residences or in the case of officially mandated property sales.

Registration Fees

For the land registry entry of the right of ownership, a fee of 1.1% of the purchase price is incurred.

Encumbrance Clearance

A buyer typically wishes to acquire the property free of encumbrances. This means that liens, easements, or other burdens must be deleted from the land registry. The deletion is carried out through notarized declarations from the beneficiaries, which the trustee obtains on commission.

Land Registry Entry and Transfer of Ownership

After all conditions have been met and the purchase price has been paid, the trustee submits the application for ownership registration in the land registry. Only upon registration does the buyer become the legal owner of the property.

Your Benefits with Legal Assistance

Real estate purchases involve diverse challenges that entail legal, economic, and personal risks. Unclear ownership structures, unrecognized encumbrances, or errors in contract drafting can lead to significant financial losses and protracted disputes.

Professional legal assistance is therefore essential to identify these risks early on and to ensure a secure transfer of ownership.

Sebastian Riedlmair
Harlander & Partner Attorneys „Nur durch eine sorgfältige Prüfung und Absicherung im Grundbuch lässt sich der Liegenschaftserwerb vor unvorhergesehenen Belastungen schützen.“

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Frequently Asked Questions – FAQ

What is a real estate purchase?

A real estate purchase is the acquisition of a plot of land or a property, where ownership transfers from the seller to the buyer upon registration in the land registry.

When is a purchase agreement concluded?

A purchase agreement is formed by the agreement of buyer and seller on the purchase price and the object of purchase. The acceptance of a purchase offer is already legally binding.

Is a written purchase agreement required?

For the transfer of ownership, a written and notarized declaration of consent for registration is necessary. Oral agreements are legally possible but not advisable.

Why is a trusteeship used?

Since ownership only transfers upon land registry entry, a trusteeship protects both parties by coordinating the payment of the purchase price and the transfer of ownership.

What taxes apply to real estate purchases?

Key taxes include real estate transfer tax, registration fees, and, if applicable, real estate income tax on sales profits.

What does encumbrance clearance mean?

Encumbrance clearance means that the property is transferred to the buyer without burdens such as liens or easements. The deletion of these burdens must be notarially confirmed.

When does one become the legal owner?

Only upon registration of ownership in the land registry does the buyer become the legal owner of the property.