If you’re a foreign buyer looking to purchase a Haus (house) or Eigentum (property) in Germany, here are a few tips to take on board before starting the search.

Although renting was historically the norm among German nationals, just over 50% of the populace now own their own home. Generally speaking, foreign buyers don’t face any direct barriers when purchasing property in the nation, but there are still a few nuances particular to Germany that it’s worth being aware of.

1. Notaries play a big role in German property purchases

As in the UK, property sales in Germany are often conducted via estate agents, known as ‘Maklers’. If a seller accepts your offer, the agent gives way to a notary, called a ‘Notar’.

The notary is a neutral intermediary in the deal between buyer and seller. As a buyer, you can pick your own notary. Naturally, an English-speaking notary is often the best bet, unless you happen to be fluent in German.
As well as overseeing the change of hands for a property, the notary also makes sure that the site can be legally sold in the first place. Notaries can additionally be used to safely hold funds in escrow, in the event that something unexpected crops up at the last minute.

The notary officially conducts the signing ceremony, which legally requires all parties to be present. If you are the sole buyer, this is simple, but if you have a partner or represent a group, all members must be present and officially identified to ensure the ceremony’s legitimacy.

The notary reads the signing contract in German, but the buyer needs to understand the document; this can be solved by hiring an English-speaking notary or having an additional translator present.

2. Additional costs can push the purchase price higher

As well as the base price of a property, there are a few additional costs that can see the total cost of buying a new home in Germany mount.

Notaries are typically paid 1.2% – 2% of the purchase price, as well as needing any fees for translation services (if applicable). There can be a significant divide between the lower and higher ends of translation costs, so find out what a notary charges in advance of hiring.

If you are conducting a sale through a broker or estate agent, their fees can range from 3% – 6%, plus VAT.
VAT fees, as well as other costs, vary depending on where you are buying in Germany. Another cost is the Real Estate Transfer Tax (RETT), which regionally varies between 3.5% – 6.5% of the purchase price.

Registration fees are another added cost, and are needed to officially name an individual as the property owner. These can range from 0.8% – 1.2%.

Broadly speaking, it is advisable to keep 8% – 15% of the purchase price tucked away to cover the extra fees you might face. The total amount you will have to pay varies from state to state, but also depends on who is involved in the purchase.

3. A property survey is always advisable

While German notaries may seem to have a limitless range of talents and offer a host of useful services for prospective buyers, they notably don’t physically examine a property.

This means that while a house may be legally solid to purchase, there could be underlying structural problems that weren’t highlighted beforehand.

Hiring an architect or surveyor to examine the site is an important means of spotting any underlying issues, especially when considering an older property.

You may also want to embark on a personal fact finding mission, taking the time to talk to locals in the area you’re planning to purchase property in and look at the average cost of comparable properties. If nothing else, it’s a good excuse to take a holiday!

Property ownership in Germany is generally something that lasts at least a decade as capital gains profits are exempt after 10 years of ownership. With this in mind, take your time in the buying process, and remember to check the Everything Overseas blog for any future updates on the German property market.