Germany is the most economically developed country in the EU and boasts a stable real estate market. At the same time, only 40% of Germans own their own homes. Although mortgages are quite affordable in the country, long-term rental property prevails here. Learn more about the procedure of buying real estate in Germany for expats, the cost and peculiarities of the legal framework

Germany is a country where both citizens and migrants can enjoy a high standard of living. It is a great place for permanent relocation due to its well-developed infrastructure, high-quality healthcare and stable economy. Germany provides expats with many opportunities to purchase real estate. In addition, owning your own home significantly increases the chances of obtaining a residence permit.

Algorithm of actions for buying a house in Germany

If you decide to buy real estate in Germany, you should follow the following algorithm of actions:

Budget planning. Calculate the exact amount you can afford to spend. Consult with the bank representatives in advance about the amount of money you can get. Be sure to take into account the administrative costs that accompany the purchase procedure: taxes, fees, etc.

Search for options. You can find a house in Germany simply on the Internet or by contacting a real estate agency for help. Make an appointment for a few viewings to get to know the market and evaluate your options. 

Sign a contract with a notary. A notary is required for legal support of the purchase of real estate in Germany. He or she will confirm the legal validity of the contract and register the owner with the land registry office. 

Payment of the deposit. When selling real estate, owners often ask for a deposit. This process should be approved by a legal intermediary to ensure the security of the deposit.

Obtaining financing. In Germany, even foreigners can apply for a mortgage. To do this, you need to provide an official document confirming your income, credit rating, and tax ID number. In addition, there is a chance to take advantage of government programs to buy real estate. It is better to consult with bank representatives about this.

Signing the contract and registering the property. The real estate purchase agreement must be signed in the presence of a notary. After paying real estate taxes, register your property with the land registry.

Legal requirements for buying real estate in Germany

You do not need the consent of your spouse to buy real estate in Germany. But in some regions, the land court that decides on the registration of property rights requires such permission. It is better to consult a specialist on this matter.

The purchase of real estate can be registered for 2 or more persons in equal shares, and no family ties are required. 

Any real estate in Germany must be registered in the Land Register. The entire history of the property with respect to current or previous owners, as well as the fact of the presence of a garage, basement, land plots or other structures, is certified there. In addition, the Register contains information on the existence of debts.

To support a real estate sale and purchase transaction, you must use the services of a state notary exclusively. This condition helps buyers to make sure that the procedure is completely transparent and fair. To buy a house in Germany, you need to perform the following steps:

1. Reserve the selected property

2. Prepare a draft purchase and sale agreement

3. Sign the agreement

4. Open a trust account and make a payment

5. Approve the transfer of ownership

Reservation of a property is carried out to remove it from the market and to start processing documents for the transaction. To reserve a property, you must make a deposit to confirm the buyer's serious intentions. After that, a public notary will be assigned to the transaction to handle the case.

Deposits and mortgages for buying a house in Germany by expats

The procedure for buying real estate involves paying a substantial deposit. The standard amount is 20% of the cost of the property. In some cases, foreigners have to pay 30-40% of the cost due to higher risks. In addition, the buyer must provide official proof of savings and an income statement for the last few years.

Mortgages in Germany are available from most banks and other financial institutions. You can seek advice from a mortgage specialist, who will tell you all the specifics of the procedure. The most popular banks for obtaining a mortgage for real estate in Germany are DKB and Santander.

You can calculate the approximate amount of the mortgage using a special online calculator. You can also use the services of a mortgage broker. Most banks in Germany have a separate section on their websites where you can apply for a mortgage and register all the necessary documents yourself. Then the bank representatives will contact you by phone and schedule a personal meeting to discuss all the conditions. 

The standard mortgage term in Germany is 25–30 years, with a fixed interest rate for the first 5 years. You can also use variable rates and other loan terms. Sometimes a part of the interest can be deducted from the tax base. But this still does not compensate for the capital gains tax.

The cost of buying real estate in Germany

Buying a house in Germany involves paying most of the costs. The seller has to pay for the services of a real estate agent, but sometimes the buyer has to pay this bill. Administrative costs on average amount to 10% of the house price, namely:

1. Grunderwerbssteue tax - 3.5-6.5% depending on the federal states

 2. Notary fee - 1.5%.

3. Registration fee - 1%

4. Real estate agent's commission - 1.5%-3%, + VAT 19%

Buying real estate in Germany involves the payment of transfer tax. Its amount may vary depending on the chosen region:

- 3.5% - Bavaria, Saxony 

- 4.5% - Hamburg 

- 5% - Baden-Württemberg, Brandenburg, Hesse, Mecklenburg-Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt, Thuringia 

- 5.5% - Saarland 

- 6% - Berlin 

- 6.5% - Schleswig-Holstein

Buying a house in Germany can be a real challenge for expats. But careful preparation and detailed planning of the process will help simplify this complex procedure. Use the services of only true professionals who will provide assistance and legal support at every stage of the transaction. Germany guarantees many opportunities for a quality life for foreigners. Therefore, buying a house in this country will be a very profitable investment in your comfortable future.

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Igor Usyk - Head of Legal Department at Visit World

For safe relocation to Germany, obtaining refugee status and employment, use the advice of an international lawyer.

We help to solve complex and simple issues for your comfort and safety in Germany.

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Products from Visit World for a comfortable trip:

Checklist for obtaining a visa and necessary documents in Germany;

Legal advice on immigration in Germany;

Travel insurance for foreigners in Germany;

Medical insurance all over the world.

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Financial aid for refugees in Germany in 2023.

Au-pair program for foreigners in Germany: features of the contract and conditions of participation.
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