Guide to buying property in Germany
Estate agents
In Germany, professional real estate agents deal with all branches of the property business. Their association is known as Immobilienverband Deutschland e.V. IVD. They bring together the buyers and sellers of houses etc., plots of land, holiday properties, companies and shareholdings; they facilitate the renting and leasing of commercial property and dwellings.
Sometimes the real estate agent will also manage rented properties, they may also facilitate finance for houses or land purchases, assist with property development transactions and undertake basic construction service. Real estate agents are expected to have excellent knowledge of the market so as to determine what a fair market price is.
It is also the duty of the estate agent to produce a transparent, complete description of the property in question. They obtain the necessary documentation such as copies of entries in the Land Registry, cadastral papers, tax and insurance documents, overviews of rental and lease revenue, interest charges and capital repayments, cost and fees.
Buying a property
There are no restrictions on foreign ownership in Germany.
A solicitor or notary is required to deal with the legal work and contract and to check that there are no liabilities. For lists of English speaking notaries or solicitors contact the British Embassy in Berlin (see link below).
A public notary must be used for the conveyance of all real estate contracts and entry of the title deeds with the local land registry.
Fees
Approx 1.5% of the buying price for the notary, 0.5% of buying price to the Land Registry Office (usually included in the fees for the notary) and between 3% and 6% to the estate agents.
Tax
Grunderwerbssteuer, property transfer tax, of 3.5% of buying price.
Grundsteuer, land tax, is based on the value of the land plus buildings and paid to the local authority, generally to cover costs for infrastructure. Tax rates vary in different local authorities.
Mortgages
Financing the property requires a good financial track record. A mortgage of up to 60-70% is possible, usually at fixed interest rates for a determined initial period of 5 to 20 years. Sometimes special conditions can be negotiated.
