Do I, as a private individual, pay VAT on a flat sale?

No. The sale is exempt from VAT, the buyer pays real estate transfer tax.

Is the agent's commission including VAT?

The commission is usually quoted including 19 percent VAT. Check the details in the agency agreement.

When is the option for VAT worthwhile?

Especially if input tax adjustment is to be avoided and the buyer is entitled to deduct input tax themselves. This should be clarified with a tax advisor.

Property sale and VAT

When selling a flat or a house, the question often arises whether VAT is incurred on the purchase price. For private sellers, the answer is almost always no. For commercial properties, a closer look is worthwhile.

Principle: VAT-exempt

Land sales that fall under the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz) are exempt from VAT according to § 4 No. 9a UStG. Instead, the buyer pays real estate transfer tax (Grunderwerbsteuer), in Berlin, six per cent of the purchase price. Therefore, for private owners, VAT generally plays no role in the sale.

Option for VAT for commercial use

If an entrepreneur sells to another entrepreneur, the VAT exemption can be waived according to § 9 UStG. The option must be declared in the notarised purchase agreement. The buyer then owes the tax under the reverse-charge procedure. This is primarily relevant for commercially used properties.

Note input tax adjustment

If input tax was claimed during purchase or renovations, a tax-free sale within ten years can lead to a pro-rata repayment (§ 15a UStG). Alternatively, a transfer of a business as a going concern (Geschäftsveräußerung im Ganzen) can be considered if a let property including rental agreements is transferred. Here, tax advice is indispensable.

VAT on ancillary costs

Even if the purchase price is tax-exempt: agent's commission, notary fees, and appraisals each include 19 per cent VAT. When reviewing offers, pay attention to whether amounts are stated net or gross.