The Sale of a Plot of Land

When selling a plot of land, similar questions arise first and foremost as with a house sale. However, there are also some other points worth mentioning here. In the case of a plot of land, care must be taken as to whether it is building land or farmer’s land. In the latter case, the property must first be developed by the respective municipality. Only when there are connections for water, gas, electricity and sewerage, it is allowed to build on the property. Building plots are generally more valuable than land awaiting construction. Just as with a house sale, the value is also determined when the property is sold. As a rule, the municipalities determine the so-called land values that have resulted from the sale of other properties every two years. However, these standard soil values are not binding for the sale. The location and transport links of the property also play an important role in pricing. Building plots in sought-after residential areas achieve higher prices. Even those plots facing south have a higher sales value. Then you have to find a buyer. In this day and age this usually happens online. Lukinski is happy to take over these tasks for you.

When searching for a suitable interested party, the following aspects can be taken into consideration:

• The type of land
• The possibilities of use
• The size of the property
• The slope of the property
• The urban or rural location
• The traffic connections

The nature of the property also determines its possible uses. Is it building land, arable land or forest land. The size of the plot is usually indicated in square metres. In the case of large agricultural areas, hectare indications are usual. The inclination refers to the gradient of the property. This is particularly the case on slopes. Land located in cities offers different uses than land located in rural areas. This is especially true for the type of development. Transport connections also play an important role. It is of primary importance mainly for building sites or industrial sites.

Taxes on the sale of land

Every sale is subject to taxes. This of course also applies to plots of land. Since 2012, taxes of 25% have been payable on the sale of land. This applies to the profit made from the sale of a property. In principle, a speculation period of ten years also applies here. The profit is calculated by the difference between acquisition costs and sales proceeds. Value added tax is not payable on the sale of real estate. Trade tax is only payable by companies if the acquired property is counted as business assets. In the case of large plots on which no construction projects are possible, division is also advisable. In some German federal states, however, a special official permit is required for the division of land. Information about this can be obtained from the public building authorities or from a civil engineer.

The building law is the basis for a later development of a plot of land. For this the building authorities need some documents such as:

• Marking
• Floor
• Floor parcel
• Outline
• Legal encumbrances
• Reported construction loads
• Information about adjacent properties

A district is an area unit that is found in the real estate cadastre of a municipality. The district describes the ownership structure of a property and is entered in the land register. The term “field” designates an open area, usually an agricultural area. A parcel of land is an officially measured part of an area. An outline sketches the area of the respective property. The legal encumbrances on real estate primarily include the mortgage, the land charge, the annuity charge, the annuity, the easement, the usufruct and the real charge. The mortgage used to be a common form of loan protection. Banks, in particular, have used these opportunities to secure loans. Today, the mortgage in Germany has been largely replaced by the land charge. In contrast to a mortgage, a land charge is independent of a claim to be secured. The annuity charge is a different type of land charge and secures payments. However, these payments do not repay the debt, but are rather to be considered as interest payments. With the life annuity, a property can be used as collateral. The life annuity as such is a contract under the law of obligations which can be sued for in certain cases. A easement prescribes the right that a neighbor may use the land or that the landowner may not do certain things on his land. This is mainly the case with transit permits or when a building ban is to be registered. The usufruct regulates the use of the property. The usufructuary thereby receives all rights like the property owner. Only one sale is prohibited. The real charge includes all actions to which the landowner commits himself. A real charge enables a creditor to auction the property.

Costs for the sale of land

Also with the property sale some additional expenses result, which are to be considered. This primarily includes the land transfer tax. It varies from one federal state to another. In Hesse, the tax rate is currently 6 % of the purchase price. In the federal state of Rhineland-Palatinate the figure is currently 5 %. In addition there is the broker’s commission. The amount of the brokerage fee is not regulated by law in Germany. As a rule, the buyer usually bears this burden. Sometimes, however, the costs are shared between the buyer and the seller. The level of brokerage fees varies from state to state. However, there are upper limits. In the federal state of Rhineland-Palatinate, the usual brokerage fee is 7.14% and is divided equally between buyer and seller. In Hesse, the broker commission amounts to 5.95 % and is borne exclusively by the buyer. In addition to these costs, there are also the costs for the notary. The amount of the notary’s fees is regulated uniformly in Germany. The basis for this is the so-called Court and Notary Costs Act. However, these notarial costs may be lower when purchasing building land. Who acquires a property, pays for it the necessary notary costs. If a building is erected on this property, this circumstance does not constitute another purchase and does not fall under the obligation to pay fees for notaries.

The expiry of a notarial deed

A notarial authentication always follows a certain scheme. For the time being, a date is chosen for the certification. At this appointment, not only the notary but also all contractual partners must be present in person. The notary reads the sales contract. Change requests can then still be made. The notary decides whether the desired changes are also possible. The purchase contract is then officially signed by the contracting parties and the notary. The notary then ensures that the purchase is recorded in the land register. In addition, the tax office is informed about the purchase, which sends the buyer the purchase tax notice. Finally, the notary delivers his fee note to the buyer.

FAZIT

A sale of real estate therefore requires extensive legal and building law knowledge. It is therefore advisable to appoint a broker in this matter. If you want to hire an estate agent to sell your property, Lukinski is the place for you. We provide you with the necessary support in the sale of your property and also take over all organisational tasks. This saves you a lot of time and you do not have to worry about building regulations or expertise. Just give us a call and make an appointment with Lukinski.