Should I mention the moveable assets in the purchase contract

If you are considering taking over moveable assets like kitchens, built-in closets and other furniture it makes sense to understand the financial implications of doing so. There is a trade-off between paying less taxes on the moveable assets and having to pay a higher interest cost.

On the one hand, mentioning the moveable assets exempts you from paying the property transfer tax (Grunderwerbsteuer), on the other hand, it means that the lender will deduct this value from the property value. By deducting the moveable assets from the property value, the loan-to-value of the mortgage loan will increase and hence you will be paying a higher interest rate. In most cases, to keep the same interest rate, the bank will require you to cover the moveable assets with your own equity. Hence, if you are considering taking over moveable assets, always check whether the tax savings are higher than the interest rate cost otherwise you may be making an expensive mistake.

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