Foreigners and locals enjoy similar rights when it comes to buying property in Germany. Legal entities are invited to confirm the legitimacy of their business with excerpts from the Chamber of Commerce (Handelskammer). Individuals applying for a mortgage must produce documents proving their identity, such as a valid identity card or passport, and income statements. It takes between two and four months to buy a property in Germany.
How it works in Germany:
1. Find the property. A local real estate agency will find properties that match your preferences as a buyer. The city, district and your budget are the main things to take into account. Once you have found one or more options that interest you, the agency will arrange viewings. Don’t hesitate to ask your real estate agent any questions about the property, payment procedures or potential discounts.
2. Pay the deposit. In Germany, buyers must make a down payment of 10% of the property price.
3. Sign the preliminary sales contract. Drawn up by a notary, the preliminary sales contract must include the names and contact details of all parties, a description of the property, the transaction value, payment procedures and contract termination terms.
4. Need a loan. There are various mortgages and options if you want to take out a mortgage in Germany.
5. Do the due diligence, get the notary deed. The notary checks the land register (Grundbuch) for any outstanding restrictions or encumbrances on the property then draws up the deed.
7. Formalise the mortgage. Sign the contract with your lending bank and open an account.
8. Notarise the transaction. The contract is drawn up in German and the buyer's language; it is then read by the notary in German before signing. If you don’t have much German, it is worth getting an interpreter. In order to complete the process, the final payment must be made. Your funds are remitted to the notary's escrow account (Notaranderkonto) and once the transaction has been recorded by the land registry (Grundbuchamt), the seller will receive your payment. At this stage, it is time to settle the commission, fees and registration charges with the agency and notary.
9. Get a copy of the land register. The notary records your name on the land register as new property owner, which will entitle you to use and
Taxes and transaction fees
There is a real estate transfer tax charged upon purchase (Grunderwerbsteuer) ranging from 3.5% to 6.5%. This tax varies by state and must be paid within four weeks of signing the final sales contract.
Real estate transfer tax
in Germany’s federal states,
%
| Bavaria | 3.5 |
|---|---|
| Baden- Württemberg |
5.0 |
| Berlin | 6.0 |
| Brandenburg | 5.0 |
| Bremen | 5.0 |
| Hamburg | 4.5 |
| Hessen | 6.0 |
| Mecklenburg- Vorpommern |
5.0 |
| Lower Saxony |
5.0 |
| Rhineland- Palatinate |
5.5 |
| Saarland | 3.5 |
| Saxony | 3.5 |
| Saxony- Anhalt |
5.0 |
| North Rhine- Westphalia |
6.5 |
| Thuringia | 5.0 |
| Schleswig- Holstein |
6.5 |
In most cases, the buyer pays the broker’s fees (Maklerprovision), which vary between 3.57% and 7.14% (including 19% VAT).
The notary charges 1% for certifying the transaction and the land registry record is 0.5% of the purchase price.
Transaction fees,
%
| Real estate transfer tax | 3.50–6.50 |
|---|---|
| Agent's fee | 3.57–7.14 |
| Notary's fee and registration charge | 1.50 |
| Transaction due diligence fee | 1.00 |
