Buying property in Germany as a foreigner

One of the strongest economies in Europe, Germany offers a high standard of living and is an attractive and safe destination for property investment. Whether you're buying a house in Germany for relocation, investment, or retirement, understanding the intricacies of the process is crucial. This guide will walk you through the steps involved in buying property in Germany as a foreigner, offering tips on the legal process, financing options, and finding the perfect home. Are you ready to find out how to buy a house in Germany? Let’s get started!

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Can foreigners buy property in Germany?

One of the most common questions is: Can foreigners buy property in Germany? The answer is yes. However, there are certain limitations when it comes to getting approved for a mortgage loan. We'll cover the requirements later in the article; stay tuned.

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Steps to buying property in Germany

• Do your research. The first step in buying property in Germany is thorough research. Websites such as ImmobilienScout24, Immowelt, Immonet, and Immosuchmaschine will help you navigate the current real estate market. When deciding where to buy, consider factors like proximity to work, public transportation, schools, and amenities. Major cities like Berlin, Munich, and Frankfurt are popular but come with higher property prices. Alternatively, smaller towns and rural areas offer more affordable options.

• Financial Planning. Before you begin searching for properties, determine your budget. Consider your savings, mortgage options, and additional costs such as the property purchase tax (Grunderwerbsteuer), notary fees, and real estate agent commissions. German banks, such as DKB, offer mortgages to non-residents, but you may need to provide a higher down payment, usually around 20-30%. Having a good credit history and a stable income can facilitate this process. If you plan on getting property in Germany with a mortgage but don’t speak the language well enough, you can contact English-speaking advisors, such as Baufi24, MyMortgageGermany, etc.

• Find the property. It might be worth consulting with a real estate agent if you're interested in buying a house in Germany, especially if you don’t speak the language. There are many English-speaking real estate agencies that can assist you throughout the process, including legal assistance with purchasing a house or buying an apartment in Germany. Check out our pick of top German language schools.

• Closing the deal. Once you find a property, a purchase agreement (Kaufvertrag) is drawn up by a notary (Notar). The notary plays a pivotal role in the transaction process. They ensure the contract is fair and that both parties comprehend the terms. The notary also handles the property registration in the land register Grundbuch, making the transaction legally binding.

Property in Germany. Mortgage for non-EU citizens

As a non-EU resident with a temporary residence permit, you might get a mortgage only if you

1. have been working for a German company for at least three months,
2. are done with your probation period,
3. make at least around 1,500 - 2,500 euros a month.

Note that even then, the mortgage is not guaranteed. You can increase your chances of getting one after obtaining a permanent residence permit.

It also may be harder to get a mortgage to purchase a house or buy an apartment in Germany as a freelancer or an entrepreneur. Banks consider self-employed individuals to be a high-risk category. For your mortgage application, you'll need to submit your two most recent tax returns, the two latest tax assessments (Steuerbescheid) from the German tax office, and a profit and loss account that your accountant verified for the previous year.

You might also like: Tax classes in Germany.

How much does it cost to buy a house in Germany?

Buying a house in Germany involves additional costs:

• Grunderwerbsteuer (property purchase tax) ranges from 3.5% to 6.5% of the property price, depending on the federal state.
• Notary fees typically amount to around 1.5% to 2% of the property price.
• Real estate agent fees can be up to 7.14% of the purchase price, and they are usually shared between the buyer and seller.
• Registration fees are usually minor but necessary for legal processing.

For example, if you buy an apartment in Germany for €400,000, you can expect additional costs of approximately €32,000 to €40,000.

Tips for buying property in Germany

Before finalising the purchase of property in Germany, hire a property inspector. This will help identify potential issues that require repairs and could impact your decision.

When you buy an apartment in Germany, you purchase a part of a larger building. This means you will also own a share of the communal areas, such as the garden, hallways, and basement. Learning about the homeowners' association (Eigentümergemeinschaft) rules and fees when buying an apartment in Germany is crucial.

Make sure all legal documents are in order, including the building's maintenance records, recent renovations, and any pending legal disputes.

Buying property in Germany as a foreigner is an attainable goal with proper planning and an understanding of the local market and legal requirements. Whether you're interested in buying a house in Germany or an apartment, this guide can be your gateway to becoming a homeowner. And remember that Profee always has your back whenever you need to make a fast, safe, and affordable transfer from Germany. Stay connected with loved ones no matter the distance.