How to buy property in Germany
Prospective homeowners do not have to be German citizens to buy an investment property or family home in Germany.
The purchase process is straightforward, with clear regulations making it easy to understand and there are no restrictions on non-EU citizens.
Once a property has been chosen and an offer made, a notary draws up the sale contract and registers the sale when the process is complete. The use of a lawyer is not required but may be recommended for some buyers.
Four weeks after the sale is registered, the buyer must pay the property sales tax.
Foreign owners should be aware that if a purchase is being financed by a mortgage (which should be sought prior to making an offer), a deposit of at least 30 per cent is usually required.
Fees and charges
The overall costs associated with purchasing a property vary by state, however, as a guide, buyers in Berlin should expect to spend roughly 15 per cent of the purchase price. The average across the country is probably closer to 10 per cent.
The property transfer tax, or grunderwerbsteuer, ranges between 3.5 per cent – 6.5 per cent depending on the state. For Berlin, this is 6 per cent and for Frankfurt’s state of Hesse, it is 5 per cent.
Both buyers and sellers contribute to the estate agent’s commission, which is on average 3 per cent for each party, plus VAT which is charged at 19 per cent.
Notary fees are usually up to 1.5 per cent, while registration fees are roughly 1 per cent.
Property sales are subject to a capital gains tax of 25 per cent if the property has been owned for less than 10 years.
Extra services
Newly built properties in cities such as Berlin are regularly sold without kitchens and so international buyers renting their property out may need support with further services.
Knight Frank offers a full 360-degree service meaning we can assist with financing options, lawyers, kitchen fitting and design, as well as furnishing.
If you have any further questions, please consult our buying guide or feel free to contact us and we can provide you with any information you need.