Real estate acquisition in Germany

5. Mar 2019 News

We will help you with the economic and legally compliant handling of the acquisition of your German property 

We can make your German real estate acquisition more economically advantageous for you:

Because we know the customs and the mandatory legal framework, which apply in the German market of residential real estate, as well as in the market of business real estate. This starts with the negotiation of the lowest possible purchase price. Often a profound awareness of the local knowledge and a competent negotiation can result in a significantly lower purchase price than by negotiating from abroad without any detailed knowledge of the actual situation on site.

Unlike in Hungary, the certification of a land purchase contract takes place in notarial form. This is independent of the type or size of the property, so it applies to both, the purchase of a garage space and the purchase of an industrial property. This means in practice that the purchase parties receive a draft bill from the respective notary. The German notary also explains to the buyer – on request – the importance of the regulation of his draft contract but the notary (according to his German job profile) should be strictly neutral on both sides of the sales contract. It follows that he informs the acquiring party exclusively about his own draft contract. Therefore, German notarized land purchase agreements explicitly include the indication that the notary doesn’t provide tax advice. However, the foreign buyer of a German property is often unfamiliar with German tax law and therefore unable to optimally arrange the German real estate acquisition for tax purposes. The same applies to the real estate contract law applicable in Germany. We support you in a legally compliant and economic acquisition of your German property.

1. notary fees 

The German land purchase agreement only becomes legally binding if it is notarised. An authentication by a German notary is legally required In such situations. The notary fees for a property purchase in Germany are set out in a fee schedule and are based on the amount the of the purchase. On average, the cost is about 1% of the land purchase price. When buying a detached house for 200.000,00€, additional costs of about 2.000€ can occur.

2. German land transfer tax

In Germany, the purchase of real estate is subject to the real estate transfer tax. Depending on the federal state, this amounts to between 3.5% and 6.5% of the purchase price (in Bavaria 3.5%, in North Rhine-Westphalia 6.5%). The tax is a condition for entry in the land register. The property purchase is is only completed with the entry in the land register if a certificate from the tax authorities is available.

3. The land register entry

Only with the entry into the land register, the buyer of a German property acquires ownership of the property. A schedule of fees stipulates exactly what costs are incurred when buying a property. Those costs aren’t significant. If the property is financed with a loan, the bank will charge a mortgage which serves as security. This also has to be listed in the land register, which causes further notarial registration costs. It is cheaper, if already existing land charges can be assigned to the financing bank. We would be happy to advise you on the financial advantages of these and other options when acquiring German real estate. Feel free to contact us by phone.

Laszlo Nagy


Discover more from NZP NAGY LEGAL

Subscribe now to keep reading and get access to the full archive.

Continue reading