Fortunately the buying process in Germany is relatively simple and a straight forward procedure. Most of the details will be handled via an impartial notary acting on behalf of the buyer and seller similar to a solicitor, carrying out registry checks etc.

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http://topforeignstocks.com/2010/04/11/ten-reasons-to-invest-in-germany/

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1. Do I have to be a German resident to purchase property in Germany?

2. What costs involved will accompanying me buying a property in Germany?

3. How long will it take until I own the property?

4. What other costs occur yearly owning a property in Germany?

5. Who takes care of the property when I am not in Germany?

6. Who would assist in selling the property once I decide to do so?

7. What other tax issues are important and where can I get advice?

1. Do I have to be German resident to purchase property in Germany? top

No. Anybody can buy in Germany who has a valid passport and the purchase funds that will be needed. Owning a property in Germany does not give one a right to immigrate to the country.

2. What costs involved will accompany me buying a property in Germany? top

In Germany, the buyer has to carry the following costs and fees:



• Purchase Tax („Grunderwerbsteuer“): 3.5% (4,5% in Berlin) of the buying price. Due about four weeks after the notary deed has been signed by buyer and seller.



• Notary fees. These are about 1.2% – 1.5% of the buying price.



• Agent fee. The buying fee for agents in Germany varies from Federal country to Federal country slightly. In most federal countries it is around 5% plus the VAT.



• Registration fees, these add up to about 0.8-1.2%.



• If financing is needed, there might also be fees from the bank side for the mortgage, plus any additional notary and registration fees for that mortgage. Any mortgage needs to be secured in the land registry (Grundbuch) and that can only be done by a notary public.

3. How long will it take until I own the property? top

From the moment of signing the notary deed until receiving the land title register confirmation several weeks can pass.

4. What other costs will occur yearly owning a property in Germany? top

The costs that are to be paid are property tax - this is different from town to town but very small (between 150 Euro and 300 Euro usually for an apartment per year, a bit more for a single-house; it depends on the size of the property ground). Then the building reserve fund which is mandatory when owning an apartment as part of a community; it is usually about 0.75 to 1.5 Euro per m² living area per month. Garbage disposal, water, common house electricity, housekeeping, maintenance of the heating system etc. are additional costs which sum up to about 0.5-2 Euro per m² and month. All of these have to be paid by the tenant if the apartment or the house is rented out. Even the property owning tax normally needs to be refunded by the tenant to the owner or should be made part of the normal utilities prepayments.

5. Who takes care of the property when I am not in Germany? top

The property can be given into the care of a property management company. On apartments this is mandatory as of today when these belong to a partitioned apartment house. The cost for property management ranges from €16-€27 per month for an apartment. Rental management is separate from general house management and can be transferred to an agency for a fee that is agreed upon by both parties.

6. Who would assist in selling the property once I decide to do so? top

If at any given point, you decide to sell the property, you can consult Joe Kiernan Properties or also offer it freely on the market. There are no rules or laws suggesting either way. However, Joe Kiernan Properties know the legal procedure of selling a property, have the market expertise and will know best how to place your property.

7. What other tax issues are important and where can I get advice? top

We are neither tax advisors nor experts. Tax issues should be taken care of by the professionals. Depreciation, interest and advertising or management expenses can be deducted. Depreciation is usually 2% per year, based on the purchase costs minus value of the ground, as this is not depreciable.



Joe Kiernan Properties can help you find an accountant for dealing with your tax affairs, but we can certainly deal with most questions that you will have.

Disclaimer



The above information is given as a guide only and is not intended to form part of any contract or German purchase deed. It is intended as a simple guide to the German conveyancing process. No legal warranties are given or representations made as to its accuracy.