Real Estate Transfer Tax – Everything You Need to Know Before Buying

Buying a property, in addition to the price and location, also entails certain tax obligations that are important to understand in advance. One of the key items in this process is the real estate transfer tax, a cost that often surprises buyers if it is not accounted for on time.  

Below, we provide an overview of the basic rules, amounts, and situations in which this tax applies.

What Is Real Estate Transfer Tax and When Does It Apply

Real estate transfer tax is a one-time tax paid upon the transfer of ownership of houses, apartments, land, or commercial properties. More precisely, it is paid upon purchase, inheritance, or another form of acquiring real estate if value-added tax has not previously been paid on that acquisition. 

Therefore, it is important to emphasize that during a property ownership transaction, only one of these taxes is paid for the same property, not both. The real estate transfer tax amounts to 3% of the market value of the property at the time of acquisition.

Who Pays the Real Estate Transfer Tax

One of the most common questions when buying or transferring property ownership is who is actually obliged to pay the real estate transfer tax. Although in most cases this is the buyer, there are certain exceptions depending on the method of acquisition, the relationship between the parties, and the type of transaction.

Buyer’s Obligations as the Main Taxpayer

As a rule, the real estate transfer tax is paid by the buyer or the new owner (depending on the method of property acquisition). By submitting the purchase documentation to the Tax Administration, the acquisition of the property is reported. 

Although this is usually done through a public notary, the buyer remains the responsible party. The deadline for reporting is thirty days from the acquisition of the property or from the conclusion of the contract, and the tax must be paid within fifteen days from the delivery of the Tax Administration’s decision.

Exceptions and Special Cases in Tax Payment

When ownership is transferred through a gift, the recipient of the gift or property is the taxpayer. Exceptions apply to gifts within the immediate family, where participants are often exempt from real estate transfer tax. If property ownership is acquired through inheritance, statutory heirs are generally fully exempt from paying the tax. Exceptions apply to more distant relatives or third parties.

In the case of property exchanges where both parties are simultaneously buyers and sellers, the tax is paid only on the difference in the value of the properties.

The Role of the Seller in the Reporting Process

During the sales process, the seller must provide documents such as a land registry extract, occupancy permit, cadastral parcel information, and a tabular statement. 

If the seller sells a property that is within the VAT system, the buyer does not pay real estate transfer tax, but only VAT, which is generally included in the apartment price.

How to Calculate the Amount of Real Estate Transfer Tax

As previously mentioned, the real estate transfer tax amounts to 3% of the market value. In practice, if an apartment costs €250,000, this amount is multiplied by 0.03, resulting in a real estate tax amount of €7,500.

The value of the property is determined by the Tax Administration and may differ from the purchase price. If the Tax Administration assesses a higher value than the purchase price, the buyer still pays tax based on the assessed value.

The Process of Reporting and Paying the Tax

After concluding the purchase agreement, the administrative part of the process follows, which is crucial for the lawful acquisition of the property. Proper and timely reporting of real estate transfer tax, along with the submission of appropriate documentation, ensures the avoidance of unnecessary penalties and delays. 

Deadlines and Required Documentation

The purchase of real estate must be reported to the Tax Administration within thirty days of concluding the purchase agreement or signing the contract. The report requires cadastral data, a copy of the purchase agreement, identification documents of the parties, a property valuation, and proof of VAT payment (if the property is subject to VAT).

The buyer submits the documentation to the Tax Administration unless the contract is notarized, in which case the matter is automatically forwarded to the authority, which is the more common scenario.

The Role of the Public Notary and the Tax Administration

The role of the public notary is to report the purchase and transfer of ownership to the Tax Administration. Since the system was digitized in 2019, notaries are automatically connected, and notarized contracts are also sent electronically. In this process, the notary submits information such as the identities of the parties, property description, data from the cadastre and land registry, and the purchase price.

After that, the Tax Administration reviews the accuracy of the entire documentation, confirms or adjusts the market value of the property, issues a tax decision, sends it to the buyer, and subsequently monitors the payment.

What Happens After Payment

Once the tax payment is received, the Tax Administration records it in its system, after which the case is closed. If the buyer believes that the assessed market value is too high, the property incorrectly defined, or the surface area incorrectly recorded, they have the right to file an appeal. 

The deadline for filing an appeal is thirty days. If the appeal is upheld, for example in the case of an incorrect market value assessment, the overpaid amount is refunded to the buyer.

Reliefs, Exemptions, and Special Cases

Although real estate transfer tax is generally paid with each transfer of ownership, the law provides a number of reliefs, exemptions, and special situations in which the tax obligation can be reduced or completely avoided. These options depend on the type of property, method of acquisition, relationship between the parties, and specific legal measures.

Exemptions for the Purchase of a First Property

With the introduction of special incentive measures, the state enacted a law in 2025 which, under certain conditions, provides a tax refund. This measure primarily applies to first-time property owners, under the age of 45, who will use the property for living rather than renting. It is important to note that the tax must first be paid, and only then can a refund be requested.

Special Conditions for Inheritance and Gifting

Family property transfer through inheritance is common in practice. Transfers of property between parents and children, grandparents and grandchildren, spouses, as well as adoptive parents and adopted children are exempt from tax. In these cases, a report is still submitted to the Tax Administration, which then issues a decision granting tax exemption. 

Exceptions apply in numerous combinations. For example, if a property is gifted to a person who is not a close family member, the new owner is taxed and pays a 3% tax. 

Unmarried couples are exempt from paying tax if they prove that they have lived in such a union for at least 3 years or have a common child.

Tax Reliefs for Agricultural and Construction Land

If the buyer purchases land directly from the state or a local government unit, in some cases they are exempt from paying real estate transfer tax.

Exemptions are possible in the case of special incentives and rural development measures. A more favorable property value assessment may also apply. However, these reliefs require prior proof and are not granted automatically.

If agricultural land is reclassified as construction land, the tax base may become higher, as it follows the assessed value of the more valuable construction land.

In practice, there are no exemptions for construction land unless it is sold within the VAT system, in which case only one tax is paid. 

Conclusion

Real estate transfer tax is paid by the buyer or gift recipient and amounts to 3% of the market value. The report must be submitted within 30 days, and the tax is paid after the Tax Administration issues its decision.

Reliefs exist for the purchase of a first property (tax refund), inheritance and gifting within the family, and agricultural land. Buyers should pay close attention to deadlines, documentation, and the possibility of appeal if they disagree with the assessed value.