Can I buy a property in Germany?
Foreigners have the right to purchase housing in Germany on the same terms as the Germans themselves. It is important that the legislation of this country does not restrict non-residents in choosing the type of real estate and location. This distinguishes Germany, for example, from Austria or Switzerland, where foreign buyers are required to obtain permission from a special land distribution commission.
The documents required to buy an apartment or house: a passport and a certificate from the bank about the account status will be a plus, which will serve as proof of the seriousness of your intentions.
Recently, confirmation of the sources of origin of funds has also been frequently requested.
Russians and Belarusians today are experiencing difficulties when buying real estate not only in Germany, but everywhere in Europe. Nevertheless, it is possible to conduct a transaction if there are certain prerequisites and conditions.
If you have a residence permit, or, even better, permanent residence in Germany or the EU, you have the right to: transfer any amount to your German account, receive loans from a German bank, invest money in shares, that is, perform any operations with your funds on a par with German citizens, including buying real estate.
If you do not have permanent residence in an EU country, but you have already opened an account with a European bank and there are enough funds on it to pay for real estate and related expenses, you can buy residential or commercial real estate in Germany. The client has the right to dispose of his money, which was already on the account, without restrictions if he is not included in the sanctions lists.
At the same time, it is impossible to replenish your account with an amount sufficient to purchase property, since in the EU jurisdiction for Russians and Belarusians there is a restriction on the storage of funds of no more than 100,000 euros. This is not enough for such a large transaction as the purchase of real estate. Prices for apartments, say, in Munich start from 300,000 euros. In the vicinity of Dusseldorf, you can buy a small apartment for this amount.
It should be noted that today German banks often refuse to open an account for Russians and Belarusians. Thorough verification of the origin of funds is too time-consuming a process that the Germans want to avoid and not take risks in this way.
However, having a bank account in Germany is not a prerequisite for the transaction. Transfers can also be made from abroad, although it should be noted that not all developers go for it. Most often buyers from the Russian Federation and the Republic of Belarus use accounts opened in Turkey, Georgia, Kazakhstan. Transfers from Russia to the accounts of organizations or individuals belonging to the jurisdiction of "unfriendly" countries, to which Germany also belongs, are impossible.
Citizens of Georgia, Kazakhstan, Armenia, Azerbaijan, and other countries of the former USSR, except Russia and Belarus are not restricted in opening accounts and transferring money from other countries if they fulfill the mandatory condition of confirming the legal origin of funds.
Citizens of Ukraine have a green light on using banking services and making real estate transactions. However, they face the problem of withdrawing money from Ukrainian banks. If we are talking about cash, then it is absolutely necessary to declare them at customs.
Stages of buying an apartment or house in Germany
Step 1. Accumulation of funds in the account
Buyers from Russia or Belarus should transfer funds to a foreign bank account in advance. As a rule, accounts opened in "friendly" countries are used.
Step 2.Selecting an object
In accordance with the wishes of the client, the agency makes an offer of several options for apartments and houses. Next, realtors agree with you on the dates of viewing the objects you like and coordinate the time with sellers or developers.
Step 3. Booking
After you have decided on the apartment or house that you want to purchase, you need to reserve it – sign a preliminary agreement (or reservation) and make a deposit. The amount usually varies from 1000 euros to 1% of the value of the object, depending on the philosophy of the developer company or the owner's desire.
The date of signing the contract of sale at the notary is set. As a rule, 2-4 weeks after the reservation of the object. During this time, the buyer needs to familiarize himself with the terms of the contract and get answers to all questions that arise.
Step 4. Signing the contract
The seller (or his proxy), the buyer (or his proxy), realtors are present at the notary's transaction.
In addition, if the client does not know German, an interpreter is required. According to German law, when signing a contract of sale, the notary reads out all its points. As a rule, this is at least 17 pages of text, so the procedure lasts 1-2 hours.
Step 5. Transaction execution and settlements
After signing the contract of sale, the notary notifies in writing the Land Register (Grundbuch) of the district court (German register of property owners), the tax service, the city administration, the municipal service and the seller's bank (if they have issued a mortgage) about the change of the owner of the property.
A preliminary record of the change of owner is made in the Land Register, blocking the possibility of re-selling the object.
Upon receiving positive responses from the above instances, the notary sends a notification to the buyer (Fälligkeit) that it is necessary to transfer the amount under the contract to a bank account (depending on the situation) to the notary's account, the seller's or the trust account of the bank in which the mortgage of the previous one may have been issued owner).
We emphasize that payment is made only in cashless form. The law prohibiting payments for real estate in cash or cryptocurrency was adopted in Germany in 2022.
Based on the value of the object, a tax is charged on the purchase of real estate (varies from 3.5% to 6.5%, depending on the ownership of the land). After its payment, the tax service sends a document of consent to the registration of the new owner of the object in court (Unbedenklichkeitsbescheinigung).
After receipt of 100% of the amount, the final entry of the buyer into the Land Register of the district court is made.
The notary sends the consent of the tax service (Unbedenklichkeitsbescheinigung) to the court with a request for the final registration of the new owner. The court issues an invoice for registration. After its payment, the new owner is entered into the Land Register (Grundbuch). The entry in this register is a certificate of ownership of real estate in Germany.
The whole process - from the inspection of an apartment or house, payment of all taxes to the entry of a new owner in the Land Register takes about 2-3 months.
If necessary, you can order an extract from the Land Register on the ownership of real estate. It can be certified by both a notary and an employee of the district court (Amtsgericht) at the personal request of the new owner.
Taxes and additional expenses
One-time tax on the purchase of real estate (Grunderwerbsteuer) ranges from 3.5% to 6.5% of the property value. The size depends on the region. For example, in Berlin the rate is 6%, and in Bavaria 3.5%.
The annual property ownership tax (Grundsteuer) is levied by the city authorities. The specific Grundsteuer rate depends on the municipality in which the property is located, and can range from 0.26% to 1.0% of the cadastral value of land and buildings. Its standard coefficient is about 0.35%. The procedure for calculating the actual amount of tax depends on many factors. For example, the rate is affected by the type of object, its location, the area of the land plot and its estimated cost, the time of construction.
The buyer of an apartment or house in Germany needs to budget for related expenses. To be paid:
- Registration fee (Grundbuchkosten) for registration of the transaction in the Land Register – about 0.5% of the value of the property;
- Notary expenses (Notarkosten) – usually from 1 to 1.5% of the value of the property.
- Commission to the real estate agent (Maklerprovision) – from 3 to 6% of the property value.
Transaction security
In Germany, the notary acts as a neutral person responsible for the purity of the transaction and protecting, according to the law,interests of both sides. In particular, before concluding a contract of sale, a notary checks the availability and correctness of all documents, such as certificates of ownership, and also studies information in land books, clarifies information about encumbrances.
No additional legal checks are required.
Installments and mortgages
Buying an apartment on the primary market, you can count on installments. As a rule, the start of sales in a new building begins at the excavation stage, that is, about 1.5-2 years before the commissioning of the object. In this case, the payment is made in stages, as the work is carried out by the development company.
When buying a ready-made object, you must immediately deposit 100% of the amount. Foreigners (except citizens of the Russian Federation and the Republic of Belarus) can take out a mortgage in Germany. In this case, we recommend contacting a reliable agency that will help you get the most favorable terms from the bank. The average loan rate is 4.5% (it has almost tripled in 2022).
Citizens of Russia and Belarus are not given housing loans today.
Is it possible to conduct a transaction remotely?
It happens that the buyer does not manage to fly to Germany, and the selection and reservation of the object takes place remotely. In this case, the real estate agency organizes an online display and solves all related issues.
If you cannot attend the signing of the contract with a notary, then you need to issue a general power of attorney to an agent, lawyer or your friends. There is also the possibility to conduct a transaction through the German consulate in your country.
Does buying an apartment entitle you to a residence permit?
By itself, buying real estate in Germany does not give the right to obtain a residence permit, but having your own apartment or house can be a significant plus in solving this issue. (The purchase of housing gives the right only to obtain an entry visa for up to 90 days).
If you purchase an apartment or a house for personal use and at the same time have high incomes from sources outside Germany, then owning real estate can become a significant positive factor for obtaining a residence permit on the basis of financial independence. The required income under this program is 4000-5000 euros per person per month.
We recommend contacting the real estate and immigration agency. You will be advised and will be helped to prepare everything necessary for the application.
Thank you for your help in preparing the article:
Irene Verkhovetskaya, General Manager Estate-Service 24
Antonina Zhivalova, Sales Manager DEM GROUP GmbH
Artem Ter-Minasyan, Managing Partner Campus Property GbR
