Supporting State Costs: Why High Fees Are a Necessary Part of a Stable Housing Market

While the recent rise in mortgage rates has drawn attention, the argument that state-imposed costs are the main culprit for housing unaffordability misses the bigger picture. The land transfer tax, notary fees, and registry charges are not arbitrary burdens; they fund essential public services and ensure legal security in property transactions. The transfer tax, for example, goes directly to state governments and helps finance schools, infrastructure, and social programs. Without it, states would have to raise other taxes or cut spending, potentially harming the very communities where people want to buy homes. Notary fees, although often criticized, guarantee that contracts are legally sound, reducing the risk of costly disputes later. Germany's property registration system is one of the most reliable in the world, thanks in part to these costs. Furthermore, the effective tax burden on home purchases in Germany is not exceptionally high compared to other European countries like Belgium or France. The real issue is not the state's share but the persistent shortage of affordable housing, which stems from construction bottlenecks, zoning restrictions, and rising material costs. Reducing state fees would provide only temporary relief, while the underlying supply problem remains. Maintaining these costs supports long-term market stability and public goods that benefit all citizens.