Acquiring Real Estate in Germany

We provide expert assistance to ensure the commercially efficient and legally secure acquisition of your German property.

We can help make your acquisition of real estate in Germany more commercially advantageous.

We are familiar with the market practices and mandatory legal framework that apply in Germany both to residential real estate and to commercial property. This already becomes important when negotiating the most favourable possible purchase price. In many cases, sound knowledge of local conditions and professional negotiation strategy can achieve a significantly better purchase price with the German property seller than negotiations conducted from abroad without detailed knowledge of the actual circumstances on the ground.

Unlike in Hungary, a real estate purchase agreement in Germany must be notarised. This applies irrespective of the type or size of the property, whether the transaction concerns a parking space or an industrial property. In practice, this means that the parties receive a draft purchase agreement from the relevant notary. Although the German notary will, upon request, explain the meaning of the provisions of the draft agreement to the buyer, the notary is required by professional rules to remain strictly neutral between both parties to the purchase agreement. Accordingly, the notary explains only his or her own contractual draft and does not provide party-specific advice. German notarised real estate purchase agreements therefore expressly state, among other things, that the notary does not provide tax advice. Foreign purchasers of German real estate are often unfamiliar with German tax law and are therefore not in a position to structure their acquisition in a tax-efficient manner. The same applies to German real estate contract law. We assist you in acquiring your German property in a legally secure and commercially efficient manner.

1. Notary fees
A German real estate purchase agreement becomes legally effective only once it has been notarised. The law requires notarisation by a German notary.
Notary fees for the purchase of real estate in Germany are laid down in a statutory fee schedule and are calculated by reference to the purchase price. On average, the costs amount to approximately 1% of the purchase price. Accordingly, the purchase of a single-family house for EUR 200,000 will result in ancillary notary costs of approximately EUR 2,000.

2. German real estate transfer tax
In Germany, the purchase of real estate is subject to real estate transfer tax. Depending on the federal state, the tax ranges between 3.5% and 6.5% of the purchase price (3.5% in Bavaria and 6.5% in North Rhine-Westphalia). Payment of this tax is a prerequisite for registration in the land register. The acquisition is completed by registration in the land register only once the tax authority has issued a certificate of no objection, the so-called Unbedenklichkeitsbescheinigung.

3. Registration in the land register
The purchaser of German real estate acquires ownership only upon registration in the land register. The land registry charges fees for registration, and a statutory fee schedule specifies the costs incurred in connection with the purchase of real estate; however, these costs are generally not significant. If the property is financed by a loan, the bank will require a land charge as security. This must also be registered in the land register, which gives rise to further notarial and registration costs. Costs may be reduced if existing land charges can be assigned to the financing bank. We would be pleased to advise you on the financial advantages of this and other structuring options when acquiring real estate in Germany. Please feel free to contact us by telephone as well.