Mar 29th 2024
CHANGE IN THE LAW FROM 01.04.2024 ON EXEMPTION FROM FEES WHEN BUYING PROPERTY
Exemption from fees:
- When purchasing a private home, the fees for entry in the land register and for liens of 1.1% up to a value of €500,000 are waived.
- Land register entries may only be made after 30 June 2024, but before 1 July 2026.
- Proof of main residence must be provided.
- The property must be purchased and must not have been transferred as a gift or inheritance.
- Registration fees must be paid for the portion of the purchase price that exceeds the assessment basis of EUR 500,000. From an assessment basis of 2 million euros, there is no longer any exemption from fees.
In its 255th session on 20 March 2024, the National Council passed part of the housing and construction package announced by the federal government. As part of this, the land register registration fee and the lien registration fee will be temporarily abolished through an amendment to the Court Fees Act in order to make the acquisition of property more affordable. Specifically, these fees are waived up to an assessment basis of 500,000 euros.
Certain conditions apply to the utilisation of this fee exemption: The property must be acquired for consideration; it must not have been transferred by way of gift or inheritance. In addition, the property must be used by the owner and serve an urgent residential need, which must be proven by submitting a registration confirmation to the land registry court. This regulation only applies to natural persons. Both the sole owner and co-owners can benefit from the exemption, provided that the flat corresponding to their co-ownership share serves their urgent housing needs, such as in the case of a condominium.
It should be noted that the building lease is also considered a "property", which is why the authorised building owner also benefits from the fee exemption. The same applies to the acquisition of a superstructure, provided it also serves an urgent residential need.
The legal transaction against payment must be concluded after 31 March. Applications for entry in the land register may only be submitted after 30 June 2024, but before 1 July 2026.
This measure is aimed at encouraging future property purchases rather than favouring those already made in the past. It is also intended to prevent registration fees already paid for legal transactions prior to 1 April 2024 from having to be refunded.
In order to meet the deadline (application before 1 July 2026), it is sufficient to apply for a priority notice for the acquisition of ownership within this period; the fee-free registration can then also take place after 1 July 2026. The same applies to the annotation of the order of priority for an intended pledge and for the registration of ownership in the case of an annotation for the granting of residential property.
The exemption from fees applies up to an assessment basis of EUR 500,000. Several liens are added together and at least 90 per cent of the financing amount must be used for the purchase and renovation of the acquired property. Registration fees must be paid for the portion of the purchase price that exceeds the assessment basis of 500,000 euros. From an assessment basis of 2 million euros, there is no longer any exemption from fees.
It should be noted that the exemption from fees is subsequently cancelled if the right of ownership is relinquished within five years or the urgent need to live in the property no longer exists. In such cases, a report must be submitted to the land registry court within one month and the fees must be paid.
The amendment to the Court Fees Act still has to be approved by the Federal Council (meeting on 5 April) and published in the Federal Law Gazette.
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