Your guide to buying real estate in Germany as a foreigner

Thinking of buying a property in Germany as a foreigner? In this article you can learn all about the procedure of a real estate transaction in the country.

Been looking for homes for rent in Hamburg and decided you are ready to buy your own place? Discover the additional costs of buying a property, and everything else you wanted to know about the nuances of searching for and buying real estate.

The rights and obligations of foreigners

A citizen of any country has the right to purchase commercial, residential real estate, and land plots in all federal lands of Germany.

To become a property owner as a legal entity every foreigner needs to get a document from the Chamber of Commerce (Handelskammer), which confirms the legality of the company’s activities.

Every property owner in Germany, regardless of their citizenship and residence permit, has to pay property taxes and reimburse utility costs. Arrears can lead to significant fines and refusal to grant a visa. The authorities can forcibly sell real estate at auction if the owner has a long history of debt.

The process of property purchasing in Germany

The participation of a realtor in a transaction is optional in Germany. But a notary is a necessary link in the process of buying real estate in Germany. An important reason to find a realtor is the language barrier and insufficient knowledge of local legislation.

Step 1: Opening a bank account and checking the property

Here’s what you need to know about opening a bank account and checking the property you want to buy.

The bank account

Foreign buyers usually make their payments via a bank transfer. Other types of payments are barely in use.

Foreigners can easily open accounts in German banks, but the country has strict legislation to combat the laundering of illegal capital.

Foreigners must be physically present at the bank for account opening.

Foreign clients are required to have a passport, proof of residence address, and correctly filled out bank forms, but some banks may also require a certificate of recommendation.

You may also need a postal address in Germany to forward documents (as a rule, foreigners indicate the address of the realtor) and knowledge of German or English at a conversational level. In rare cases, the bank asks for income certificates. You can deposit the money immediately after.

The property check

First things first, check the land register (Grundbuch). You can do this yourself or ask a notary for help. The land register records all present and past owners, possible encumbrances, etc.

Other important documents related to real estate are the housing charter (Teilungserklärung), the minutes of the owners’ meetings (Eigentümerversammlungsprotokolle), the economic plan (Wirtschaftsplan), and the calculation of utilities (Nebenkostenabrechnung).

The housing charter specifies the shares of private and common ownership on the land plot and in the structures located on it, as well as all kinds of rules (choosing a manager, keeping pets, etc.).

From the minutes of the owners’ meetings (usually the last three years are considered), you can get information about the owners of other apartments, the decisions made on repairs, the problems discussed in the house, etc.

The economic plan and calculation of utilities show the monthly payment amounts by points – housing rent (Hausgeld or Wohngeld). From here you can see what the monthly fee consists of and how it can be optimized.

Step 2: Concluding the purchase and sale contract

The seller and the buyer meet at the notary to sign the contract. Both parties or their proxies can also certify contracts with various notaries in different cities. The contract comes into force after its legal completion by both parties.

Notarization of the contract of sale by a notary is a mandatory transaction condition.

Please note that the notary is obliged to read the contract of sale out loud, as well as answer any additional questions. After the contract is read and all the points are clarified, the buyer, seller, and notary put their signatures on the document, and everyone receives its certified copies.

Step 3: Making a payment

There are two settlement options between the buyer and the seller: payment directly to the seller’s account or settlement through a notary’s trust account (Notaranderkonto).

The money is transferred to the seller’s account after receiving a letter from the notary confirming that all the necessary prerequisites have been met (Preisfälligkeitsbescheinigung).

Payment by means of a notary’s trust account is used if the parties wish to transfer the property quickly. The notary opens an escrow account specifically for the transaction after signing the purchase and sale agreement, the buyer transfers the purchase price there within the agreed period (usually two to four weeks). After paying the entire amount, the keys are transferred to the buyer, and they get the right to move into the purchased property.

Only a notary has access to the trust account. After fulfilling all the prerequisites, a notary transfers money to the seller’s account.

Step 4: Registering a new owner

Immediately after signing the contract of sale, a notary sends an application to the land court (Grundbuchamt) for preliminary registration of the buyer as a new owner. After that and subject to the fulfillment of other necessary prerequisites, the amount is transferred to the seller’s or notary’s account.

All entered data is stored in the electronic cadaster (land registry), from which the owner can request an extract at any time.

Since the final registration procedure may take several weeks, the purchase and sale agreement specifies the date of the economic transfer of ownership rights, from which the buyer assumes all rights and obligations related to the ownership of real estate: accommodation, rental, payment of monthly expenses, etc. For convenience of calculations, the transfer of ownership rights is usually assigned on the first day the month following the payment, or the day after it.

The purchase and sale transaction takes from two to four months from the preparation of documents to the final registration of property rights in the land register.

Taxes and additional expenses when buying a property in Germany

Here’s what you need to know about taxes and additional expenses when buying a property in Germany.

Property purchase tax

A prerequisite for entering a new owner into the land register is the payment of a tax on the acquisition of real estate (Grunderwerbsteuer). The amount of tax varies depending on the region.

The buyer and the seller are jointly responsible for the payment of this tax. Every purchase and sale contract usually specifies that all related transaction costs are borne by the buyer.

All expenses of the buyer include: tax on the purchase of real estate, notary services, costs of re-registration of property rights, broker’s commission.

Payment for notary services

Notary expenses are calculated according to a special table, according to which a certain amount is charged for each operation. On average, it turns out about 1.5% of the market price, but if the cost of real estate is low, then the notary fee may be higher – about 2-3%. And vice versa, when buying expensive objects, the percentage is below average.

Expenses for registering a new owner

The cost of registering property rights in the land register is on average 0.5% or up to 1.0% if the real estate cost is low.

Realtor’s commission

The broker’s commission is on average from 3 to 6% + VAT, and in most cases the buyer pays it. Sometimes the commission or part of it is charged from the seller and is included in the property price. For cheaper objects, brokers sometimes independently set a fixed amount of commission.

Mortgage in Germany

Foreigners can count on mortgages in German banks. But in this case, the costs will increase, the rate for consideration is 1% of the property price on average.

Getting a residence permit in Germany

The purchase of the real estate in Germany is not the basis for obtaining a residence permit. But there is an exclusion to this rule.

Economic independence

There is a clause in the law “On the stay of foreigners” which refers to certain “other cases” that may be the basis for issuing a residence permit. The order of the German Ministry of the Interior explains such cases. It says that any wealthy foreigner who wants to link the future life with Germany can get a residence permit.

The same right is granted to a person who has a holiday home in this country, and uses it regularly. At the same time, the property can be either purchased or rented.

Several other options to get the German residence permit are not related to real estate purchasing.


You can apply for a residence permit on the basis of employment in Germany, if you already have an offer from a German employer. It is not allowed to start working until you receive the document.

Opening a business

The most common form of ownership is a limited liability company (GmbH).

The amount of the authorized capital for a limited liability company is €25,000, while it is enough to deposit half of the amount to get started. A foreign founder of a company who does not have a residence permit can be appointed as a manager if they have the opportunity to enter the EU at any time, for example, based on a multi visa. On average, the company registration process takes from 1.5 to 2.5 months.

Please note! The main factor influencing the granting of a residence permit to an entrepreneur is economic feasibility. Each region independently decides how useful your business for its economy.

Summing up what you need to know about buying a property in Germany

To sum up, here are the main points to remember when buying a property in Germany as a foreigner:

  • Foreign property buyers have the same rights as residents.
  • The presence of a notary at the real estate transaction is obligatory.
  • Every buyer needs to check real estate in the land register before buying it.
  • A typical real estate transaction takes from 2 to 4 months.
  • Buying property in Germany does not give a right to a residence permit.