Germany Guide
Buying Property in Germany: Process and Obligations
Key Figures at a Glance
| Indicator | Value |
|---|---|
| Real estate transfer tax | 3.5 % (Bavaria) to 6.5 % (including North Rhine-Westphalia), Hamburg 5.5 %, Berlin and Hesse 6 % (Haufe) |
| Notary and land registry | approx. 1.5 to 2 % of the price, of which land registry around 0.5 % (Finanztip) |
| Agent's commission | for apartments and single-family houses split equally if both sides have an agency agreement (Section 656c German Civil Code) |
| Tax-free sale | after a holding period of 10 years or with owner occupation in the year of sale and the two previous years (Section 23 Income Tax Act) |
The Purchase Process
- Reservation and financing. A reservation is not binding. The purchase only becomes effective once notarised (Section 311b (1) German Civil Code). The bank’s financing commitment should be in place before the notary appointment.
- Check the documents. Land register extract, for apartments the declaration of division, minutes of owners’ meetings and the budget. The seller or agent must present the energy performance certificate at the viewing at the latest (Section 80 (4) Building Energy Act).
- Draft contract. For consumer contracts the notary provides the draft as a rule two weeks before notarisation (Section 17 (2a) Notarisation Act).
- Notarisation and priority notice. The notary reads out the contract and applies for the priority notice of conveyance in the land register. It protects the buyer before payment.
- Payment. Payment follows the notary’s notice of maturity, by bank transfer only; cash, crypto assets and gold are excluded (Section 16a German Anti-Money Laundering Act).
- Tax and land register. Once the real estate transfer tax is paid, the tax office issues the clearance certificate; only then does the land registry enter the buyer as owner (Section 22 Real Estate Transfer Tax Act).
After the Purchase
- Owners pay annual property tax to the municipality.
- For apartments and single-family houses, buyer and seller share the commission equally if both have an agency agreement (Section 656c German Civil Code).
Prices, locations and purchase costs: Real estate in Germany.
Purchase Costs and Taxes
Worked example: apartment in Hamburg for €500,000
| Item | Amount |
|---|---|
| Real estate transfer tax 5.5 % | €27,500 |
| Notary and land registry, approx. 1.5 to 2 % | approx. €7,500 to €10,000 |
| Buyer's share of commission, example 3.57 % incl. VAT | €17,850 |
| Total | approx. €52,850 to €55,350, around 10.6 to 11.1 % |
The commission is freely negotiable; when it is split, the buyer pays no more than the seller. Without an agent the item does not apply.
Documents Before Buying
- Land register extract: owner, third-party rights in section II, land charges in section III
- For apartments: declaration of division, minutes of the last three years, budget, annual statement, maintenance reserve, approved special levies
- Energy performance certificate, register of building encumbrances and, for houses, the building permit and floor area calculation
- For let properties: leases, rent increases, deposits and any open disputes
Letting
- Rental income is subject to income tax. Buildings can be depreciated, as a rule at 2 % a year, at 3 % for completion from 2023 (Section 7 (4) Income Tax Act).
- Non-residents pay tax in Germany on rental income from German property (Section 49 Income Tax Act).
- Many cities apply the rent cap, for example Hamburg, Berlin and Munich until the end of 2029 (Finanztip).
Selling
Gains from selling private property are tax-free if more than ten years pass between purchase and sale or if the owner lived in it in the year of sale and the two previous years (Section 23 Income Tax Act).
Questions for Your Tax Adviser
- Is it better to buy privately or through a company?
- Which part of the price relates to the building and can be depreciated?
- How do financing interest and maintenance costs affect tax?
Who Does What
- Notary: draft contract, notarisation, priority notice, maturity, transfer of ownership
- Bank: financing and land charge
- Tax office: transfer tax and clearance certificate
- Agent: property, documents, negotiation and coordination until handover
Overview, no legal or tax advice. Before signing, please involve a notary or lawyer in the country concerned. Figures with source and date; figures marked “approx.” and worked examples are non-binding estimates.