The Buyer's Guide
Buying a property in Germany
The Buyer's Guide
So you have decided to buy a property – congratulations! Whether searching for a new family home, or as a rental investment - your first property or your 100th - there is no feeling quite like it. You are making a smart decision in the short, medium and long term. The inevitability of long term property ownership is the finest way to secure your future and ensure financial security in retirement. As a long-term investment, real estate’s stability makes it crisis-resistant, and with interest rates still considered low, plus the ability to fix for up to 20 years, now is the time to buy in Germany. While it can seem daunting, do not fear! The process need not be complicated with the right guidance! I hope you find the following useful in your search for an apartment, and throughout your ownership.
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Why you should rely on ACCENTRO
With a real estate portfolio of more than 5,200 units, we are specialized in enabling tenants, owner-occupiers and capital investors to realize their dream of owning their own four walls as a solid investment for the future.
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Introduction to Germany
Be prepared: What things do I need to keep in mind?
When buying real estate, one or the other additional costs should be considered and planned for. These differ from country to country – but in Germany they also differ state to state. As an international buyer, you can click below to get more information on what things play a role in addition to the purchase price.
Do I need a lawyer?
As an International buyer, not domiciled in Germany, you need a local lawyer to oversee the purchase. The lawyer will provide an extensive service for you, not just reviewing legal documents.
Registered Address
It is a pre-requisite that all buyers are required to have an address in Germany to receive all legal documentation. Your appointed lawyer willact as your legal recipient of all documents during the buying process and beyond.
Document review & summary
Your lawyer will receive and review all the legal documents including the sales contracts, and declaration of division to check all is in order, and provide you with a summation. They will be able to answer any questions you have about the contract and the procedure in general.
Signing Contracts at the notary
As previously mentioned, once the POA is signed and returned, the lawyer can act on your behalf to sign the sales contracts at the notary office. Not only does this save you the time and inconvenience, it also means you do not need to travel to Germany – again saving you time & money.
Signing Power of Attorney (POA)
In Germany, the sales contracts are presided over by an independent notary. At the signing of the purchase agreement, the notary will read aloud the entire sales contract, in German – a process that can take a number of hours. To negate the need for your presence (and avoid all travel costs!) the lawyer can sign these contracts on your behalf. They will provide you with a personalised POA agreement, which you need to have signed and witnessed at your local German Embassy, or by a local German Notary office if you can.
Eskrow Account
Your lawyer will also set you up a personal Eskrow account in which to transfer your mortgage deposit and additional purchasing costs, and will then disperse the money as and when invoices are received – on your approval.
As a buyer living in Germany, you do not legally require the services of a lawyer. Often, the notary will produce the sales contract in both English & German, and the notary themselves can answer most contract related questions. You will however, need the services of a sworn translator at the contract signing, unless you speak fluent German.
Ongoing costs
Once you have purchased your property, the fun doesn’t stop there. There are a number of ongoing costs relating to taxes and property / building management that you need to consider.
Selling your apartment
Current German law states, as an individual owner, you can sell your rental investment apartment after 10 years of ownership, and pay 0% tax on any profit that you have made. It is currently the only asset class offering this. This law is reduced to just 2 years if you have lived in the apartment yourself and not rented it out.
Due to recent legal changes, the buyer and the seller must now split the sales commission 50/50. As a seller, your percentage can range from 1.5- 3.5%, depending on the commission level that the selling agent charges their clients.
FAQs
Have you got questions? Get in touch with us!
We would be delighted to assist you in your property search, and to answer any questions you might have. For a quick chat or a full consulation, please get in contact using the links & information below. We look forward to speaking with you!
Michael Totman Director International Sales Advisory office ACCENTRO Berlin Phone: +49 (0)30 / 887 181-41 E-Mail: mail@accentro.de
Our hotline is available Mo to Fr, 9am to 6pm (CET)
