Purchase process
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Transaction costs 10–15% of the purchase value | Mortgage rate 1.5–2% per annum |
In Germany, foreign nationals can buy real estate of all types — land plots, residential and commercial properties — without limits. Germany
Transaction costs
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This article describes the typical process for buying a German property. Details of the procedure and the order of stages may vary between transactions.
1. Choosing the property
The buyer decides on the purpose of the purchase, property type, budget and contacts an agent. They sign a brokerage agreement, which obliges the client to pay

At this stage, the buyer usually decides whether to register the purchase to an individual or a legal entity. This affects the rental income tax rate if the property is going to be leased. For individuals, the tax is calculated at a progressive rate ranging from 14.77% to 47.475% (including the solidarity surcharge), while for legal entities the rate is fixed at 15.825% (on condition that property leasing is the only commercial activity performed by the legal entity). Company registration takes 2 to 4 weeks and costs
Can a buyer purchase a property from outside Germany?
2. Reserving the property
After choosing a property, the buyer signs a reservation agreement with the agent. Under this agreement, the agent books the property for the time needed to draw up the sales agreement and conduct other preparations. As a rule, when signing the agreement, the buyer makes a down payment of 10% of the property price.
In transactions involving commercial real estate, both parties also sign a letter of intent (LOI), which includes key transaction terms and the closing date. Usually, the client does not pay a deposit and has no financial obligations to the seller when signing a LOI.
At this stage, the buyer opens a current account with a German bank to pay for the purchase. the same account can be used to pay taxes, utility bills, compensate for accounting services and receive rent in the future. If the client takes out a mortgage, the account is usually opened with the bank that issues the loan.
To open an account, the buyer provides a CV, passport and documents proving the legal origin of funds. Banks are obliged to perform customer due diligence as required by the Know Your Customer (KYC) regulation aimed at preventing money laundering and financing criminal activity. Opening a bank account usually takes 5 to 7 days, though in some cases KYC take several weeks to complete.
3. Preparatory actions
As a rule, before purchasing expensive property, especially commercial real estate, buyers order a comprehensive due diligence. it may include a technical audit, legal review, tax analysis and transaction risk assessment. Due diligence takes about 1 month and costs

At the same time, the buyer applies for a mortgage if necessary. Depending on the property value and
Mortgages are a cheap way for rental property owners to substitute some part of investment, increase ROI and reduce the income tax payable. Loan payments are deducted from their incomes, reducing the tax basis.
Before issuing a mortgage, lending banks require their clients to get an independent certified appraisal to assess
4. Signing the agreement
To formalise the transaction, the buyer and the seller hire a notary, who draws up the sales agreement and negotiates details of the transaction with both parties.
Who chooses the notary? Usually, it is the buyer, as the buyer pays the notary fee. In Germany, notaries are independent contractors and represent state bodies.
Along with other details, the notary checks the land register (Grundbuch) for the previous and current owners of the property, any outstanding restrictions, mortgage and

The notary drafts the final agreement in German and specifies the contract date as soon as all the clauses have been agreed upon. The buyer and the seller sign the agreement
5. Registering and paying for the transaction
Once the agreement is signed, the notary places a new preliminary property ownership record on the land register. The buyer pays the remaining property costs. Depending on the agreement terms, the money is either transferred directly to the seller or through a trust account (typically in major transactions).
If there is a mortgage encumbrance on the property, the notary usually arranges the mortgage to be removed
After payment, the buyer receives the keys and becomes the economic owner of the property, and is entitled to use it or rent it out. The buyer pays the transfer tax, as well as agent, notary and registration fees, which typically comprise
Once the seller acknowledges the receipt of funds and tax authorities verify the payment of tax, the notary lodges a request to place a definite record on the land register. On the grounds of this record, the transaction is considered closed and the buyer becomes the legal owner of the property.
- Property Prices
- Buying and Registering
- Mortgage
- Residence
- Property Maintenance
- Taxes
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