Buy a house in Germany

Buying a German property

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Dreaming of a settling in a Bavarian farmhouse or a renovated warehouse studio in Berlin? Our guide to buying property in Germany explains how to make those dreams come true, from the legal requirements to the fees, and where to search for your new German home.

From finding a house in Germany to signing the contract, Hypofriend, a financial company that advises expats on German mortgages, takes you through the process of buying a home in Germany.

While most countries swing strongly in favour of either renting or buying your home, the options are balanced in Germany, with just around half the population owning their own homes, one of the lowest rates in Europe. Average purchase prices for a property in Germany are relatively low for central Europe at 1,500–2,500 per square metre. The average price for a 30 square metre property (a small apartment) is 60,000, while a 100 square metre apartment averages around 250,000. Prices are typically up to 50% higher in the major cities, such as Berlin, and Munich is the most expensive city in Germany. 

Hypofriend combines technology & advanced insights from finance, to make mortgage decisions, easier, cheaper and sounder. They want to reduce the complexity and high cost, improving the customer experience and the outcomes.

While Hypofriend is not yet a mortgage broker, they are a financial technology company that provides advanced financial tools to users and brokers to improve the mortgage decision process.

Should you rent or buy in Germany?

House prices and rents have risen dramatically in Germany in the last decade, with rents rising 15% between 2008 and 2013 and house prices rising 23% in the same period. German property has been seen as a stable, reliable investment by both local and overseas investors, and the market has been largely resilient in the wake of the 2008 financial crisis and even showing signs of a housing boom as a result.

Although property prices have traditionally been relatively stable in Germany, popular urban neighbourhoods are showing signs of growth; in 2016, the most expensive German property sold was in Berlin's central Mitte district at €19,018 per sqm, beating Hamburg's record of 19,000 per sqm.

As property prices seem to be rising faster than wages, many feel the trend is unsustainable and are urging the government to correct it. As a result, it's unclear what the future holds. This uncertainty combined with a capital gains tax (abgeltungsteuer) of 25%, which applies to any property owned for less than 10 years, means that for many expats buying property in Germany is only attractive for longer stays. Transaction costs also range from 7–12% for buyers (around 2–4% for sellers) on top of the purchase price. Find out more about the alternative in Expatica's guide to renting a home in Germany.

Are foreigners allowed to buy property in Germany?

There are no restrictions to foreigners buying property in Germany. You may buy property in Germany even if you are a non-resident and not an EU national.

German property

How to find a German property

Properties may be sold either privately or through an estate agent (Immobilienmakler). In either case, the onus is usually on the buyer to find a property they are interested in and then approach the owner or their agent. This also means that estate agents are usually paid by the seller, but this is not always the case. As agents' fees are typically 3–7 percent of the purchase price, it's important to check who is paying them. You can find an estate agent through their national organisation, the IVD.

As in most European countries, you can find adverts in newspapers and online. Properties for sale may have a sign in the window or notice board in the garden advertising their status, but this is relatively rare in Germany so don't count on spotting every house for sale, even on a street you walk down every day.

Online property portals

Choosing a property
Germans typically expect to buy a property and live in it for an extended period, or for life, so take time making the decision. Turnover in attractive areas can be low, so it's best to give yourself a year or more to find and buy the perfect home.

Houses in Germany have to meet certain minimum legal requirements regarding roofing, windows, heating and similar items. You can expect to be given some information on these factors, but you may not get full information. Structural surveys are not a standard part of the process, but are nonetheless a good idea. You can hire an architect or a surveyor (amtlich vereidigter sachverständiger) to do a survey.

It's important to note that it's hard to remove tenants, so if you are buying a property you intend to occupy yourself, choose one that is unoccupied.

Mortgage calculators

Online mortgage calculators for Germany can help you determine how much you can borrow and estimate your monthly rate:


Buying a property in Germany: Find a home in Germany

Buying a property in Germany

Expect to spend a significant period house hunting, but once you've found a property it can take just over a month to complete the deal. The steps are typically as follows:

  1. Investigate mortgages and get an offer in principle.
  2. Find a suitable property.
  3. Make an offer.
  4. The notary (notar) will draw up the sale contract.
  5. Finalise the mortgage.
  6. Sign the contract.
  7. Notary registers the sale.
  8. Four weeks later, you must pay the property sale tax.

It's important to note that signing the contract isn't enough to transfer the property. The property must also be registered, which the notary will do. At this point, the government will check that there are no outstanding issues regarding the sale. The notary will already have made a check, so this rarely raises an issue, but if it does, the property transfer will not be complete until the knots are untangled. For this reason, many people choose to use the notary as an escrow. In this case, the sale price is transferred to the notary's account (notaranderkonto) before being released to the seller.

Legal requirements
You are legally required to use a public notary (notar) to complete the sale of a property. The notary will act as a middleman or arbitrator, and should be impartial.

The notary will check the records to ensure that there is no reason why the sale cannot go ahead, however they will not inspect the property or demand information on its condition from the seller. They will ensure that all the paperwork is completed correctly. The deed of sale will be witnessed in their presence.

You have the opportunity to choose your own notary, and if you can find one who speaks your language, do so. Otherwise your embassy will often have a list of translators they can recommend. The British embassy has a list of English-speaking lawyers and translators.

Funding purchase: deposits and mortgages
You should expect to put down a significant deposit when you buy a home in Germany. A minimum deposit of 20% is standard, however expats have been asked by lenders for deposits of 40% as they are seen as higher risk. You may also be asked to provide evidence of regular savings over the last several years.

A mortgage (Hypothek) is offered by most banks. The major and national banks typically have a mortgage advisor on staff, who will be able to discuss your needs with you. Some even speak English, but this is not guaranteed. Get an idea of your situation using an online mortgage calculator before your appointment, or hiring the services of an expat-friendly mortgage advisor such as Hypofriend.

Most German banks have an online section where you can work through the paperwork to apply for a mortgage in your own time. They will then follow this up with a phone call and an in person meeting before agreeing a mortgage in principle, which you can use to put in an offer on a property.

Mortgages typically have a 25 or 30 year period, with interest rates fixed for the first 5 years or so. Variable interest rates and other loan periods are available, but Germany does not have some of the riskier mortgage types that are available in the USA and UK. You will not find, for example, an interest only mortgage for the full value of a property.

As a benefit, part of your mortgage interest may be tax deductible depending on your situation. However, this benefit is unlikely to offset the capital gains tax mentioned above, so is typically only an advantage for those who stay put for a long period.

Fees and charges
When buying a property in Germany, you can expect to pay most of the costs. Typically, the seller will pay the estate agent, however if you have used a buyer's agent or the agent splits their fee, the buyer may still have to pay this cost.

The total cost to the buyer of purchasing a property is usually around 10% of the purchase price. This covers:

  • Property transfer tax (grunderwerbssteue) of 3.5–6.5%;
  • Notary's fees 1.2–1.5%;
  • Registration fees 0.8–1.2%;
  • Estate agent's fees, if shared, of 1.5–3%, plus VAT at 19%.

Apart from the estate agent's fees, costs are typically fixed by regional governments. They vary somewhat across Germany, hence the ranges shown above.

The contracts
Contracts are in German and signed in the presence of a notary. You should ensure you fully understand the contract before signing, and bring an interpreter with you if necessary. You have the right to have a translator with you, but you will have to supply (and pay) them yourself. In some areas, you may be able to find a notary who is bilingual.

As you will be arranging financing for the property at the same time as you are arranging the sale, it's important to include an exit clause in the sale agreement that gives you a way out if you can't arrange a mortgage.

Selling a property in Germany

It's important to consider how you will dispose of your property, particularly if you anticipate a sudden relocation. As most of the costs of the transaction are paid by the buyer, selling a property in Germany is relatively cheap. However, once the property is sold, you will have to pay capital gains tax of 25% if you have owned the property for less than 10 years. In addition, properties can be slow to move, unless you've managed to choose a particularly popular area, and this may tie up a significant amount of your capital. However, the rental market is strong and you are allowed to own property in Germany even if you are a non-national non-resident, so you may be able to continue to profit from your investment long after you leave the area.


Expatica find a house

Find a house in Germany
using Expatica's housing search.


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3 Comments To This Article

  • Peter posted:

    on 7th October 2015, 14:28:19 - Reply

    Can anyone tell me what documents I need to bring with me to buy a home in Germany? I'm from the USA and I will be flying to Germany within 2 or 3 months and I can't find an answer to this question. I would expect the Passport to be required maybe, but what else?

    [Moderator's note: You can also post questions on Ask the Expert service]

  • James posted:

    on 9th March 2015, 17:06:56 - Reply should give you some clear information.
  • Paul posted:

    on 6th December 2014, 14:55:01 - Reply

    With regard to Capital Gains Tax, the information seems to contradict the advice we have recently received from the Finance Amt of our district (Siegburg), who have stated that, regardless of the fact that we have only lived in the property for three years, there will be no Capital Gains Tax to pay as it's our only property. If anone has other information, could you please post.