With a GDP of 2.3 trillion Euro, Germany is the biggest economy in Europe and 3rd worldwide, after the USA and Japan. With a population of 82 million it is the heart of European politics and economic influence.
Germany is world champion in exporting goods, around 900 billion Euros per year in commodities, such as cars; Mercedes, BMW, Porsche, Volkswagen and Audi as well as chemical, pharmaceutical and engineering services.
From an investment point of view, it can be seen as a reliable market. It has a secure political and legal system with a reliable strong currency, the Euro.
Can anyone buy property in Germany?
Yes, regardless of nationality.
Do I need a permanent residence?
No, it is not necessary for purchasing property but owning property does not automatically give you the right to live and stay in Germany. You need to apply for a visitor’s visa or permanent residency. Regulations and entry requirements should be checked with the Embassy.
Do I need a translator?
If one of the parties does not speak German, a qualified translator is required to make sure all persons understand the content of the purchasing agreement.
What are the associated costs to purchase?
Usually all transaction costs are paid by the buyer and are about 10% of the purchase price.
- Real estate agent commissions including VAT – in Berlin are typically 7.14% of purchase price depending on type of real estate and location
- Property transfer tax – 4.5% of purchase price in Berlin and Hamburg, otherwise 3.5%
- Notary public and land registration – 1.5% of purchase price
- Certified translator: approximately 1.000-2.000 Euro
- Legal advice (depending on transaction size) approximately 1.500 Euro …
What are the costs of owning commercial property?
The costs of owning property depend heavily on the agreed provisions of the lease contract and the type of lease. Whereas there are more options for commercial lease contracts it is not true that it is easy to pass on ancillary expenses to residential tenants, German law tends to favor residential tenants. However, generally speaking all costs except maintenance, repairs and property management may be passed on to the tenant. Furthermore, it’s up to the investor to accumulate a structural reserve.
The costs of property management vary from 25-35 Euro plus VAT per apartment unit per month.
What is a notary public?
In Germany the notary plays an important role in contractual agreements relating to special laws such as
- property law
- registration of land
- family law
- corporate law
- inheritance law
The notary is a solicitor, who acts on behalf of the government and is authorized to certify deeds. He provides independent and impartial advice to contractual parties. The notary officiates either as a single-profession notary, which means he is acting a a notary only or as a legal attorney and notary at the same time.
The notary prepares the deeds in accordance with German law and provides legal advice regarding the contract. He will read aloud the deed in front of all parties involved. The deed is signed by all parties and sealed by the notary. It is irrevocable.
In comparison to the USA or UK, the role of the German notary is much more important in daily business. All property transactions must be signed and sealed at the office of the notary public (311 of the German Civil Code).