Benefits of Buying Property in Germany

Purchasing real estate in Germany can have many advantages, especially for investors and international buyers. Below are some of these benefits:

Conditions for Buying Property in Germany

There is no restriction for foreigners to purchase property in Germany, and they can easily buy real estate. However, certain conditions and requirements must be met to carry out this process, which must be taken into consideration. These conditions include:

• No restrictions on property purchases by foreigners
• Proof of financial capacity
• Payment of at least 30% of the property price as a down payment
• Additional costs such as taxes and notary fees
• Having a German bank account
• Legal advice from a specialist lawyer
• Possibility of obtaining a mortgage for foreigners with special conditions

Steps to Buy a House in Germany

The steps to buy a house in Germany for foreign nationals generally include the following:

1. Searching on real estate websites, visiting real estate agencies, or using the services of property consultants.
2. Technical and legal examination of the property to ensure there are no potential issues.
3. Negotiating with the seller regarding the price and purchase terms.
4. The purchase contract must be drawn up and certified by a notary.
5. The contract contains the details of the transaction, such as the price, payment terms and the delivery date of the property.
6. Payment of the property transfer tax, which is usually 3.5 to 6.5 percent of the purchase price.
   Payment of notary fees (Notarkosten) and property registration, which are around 1.5 to 2 percent of the property price.
   Real estate agent fees, if you use their services, are usually 3 to 7 percent of the purchase price.
7. After paying the fees and signing the contract, the property is registered in the buyer’s name in the land registry.
8. The notary is responsible for officially registering the change of ownership.
9. After completing all legal procedures and paying the fees, the property is delivered to the buyer.
10. Final completion of the document transfer and handover of the keys.

Documents Required for Purchasing Property in Germany

To buy a house in Germany, the following documents and paperwork are required:

• Proof of financial capability.
• Proof of sufficient income or bank statements.
• Valid passport or identity card.
• Proof of employment.
• German bank account.
• Tax number (non-residents may need a tax number in Germany obtained from the local tax office).
• Property purchase contract.
• Notarized purchase contract.
• Approval from the foreign office (if applicable): Non-EU residents may need approval from the foreigners’ office to buy property.
• Most recent tax declaration.
• Selbstauskunft Questionnaire: You must complete a questionnaire called “Selbstauskunft” where you provide personal information such as name, current income, marital status, number of children, etc.

Minimum Investment Required to Buy Property in Germany

To determine the minimum investment required for this, several factors must be considered. One influential factor in purchasing property in Germany is the geographical location of the property. Properties located in highly populated, industrial, tourist, or commercial areas tend to have higher prices.

Germany’s real estate market has grown significantly in recent years, affecting property prices. While the minimum investment to buy property typically ranges from €200,000 to €500,000, exact costs vary based on market conditions. Buyers should also account for additional expenses like brokerage fees, taxes, and legal costs when investing in German property.

House Prices in Germany

The price of buying a house in Germany depends on various factors, including geographical location, size and type of the property, housing market conditions, and economic conditions. Below, we review the house prices in some important cities in Germany in the table below:

Prices for Villa Houses in Germany

In large and populous cities such as Munich, Frankfurt, and Berlin, the prices for villa houses are significantly high. For instance:

• Munich: The price per square meter of a house in the city center is about 11,919 euros and in the suburbs about 8,833 euros.
• Frankfurt: The price per square meter in the city center is about 8,591 euros and in the suburbs about 5,916 euros.
• Berlin: The price per square meter in the city center is about 7,995 euros and in the suburbs about 5,704 euros.

Given these prices, the cost of a villa house with an area of 200 square meters in central Munich may reach about 2,383,800 Euros.

In suburban areas and villages of Germany, the prices for villa houses are usually more reasonable. For example, in the suburbs of Cologne, the cost per square meter is about 4,425 Euros. Also, the average price of houses in rural areas of Germany is about half the price of urban houses.

Affordable Houses in Germany

Rural areas and small towns in eastern Germany usually offer the affordable houses. For example, in the districts of Prignitz (Brandenburg) and Elbe-Alster (Brandenburg), the cost per square meter is approximately 1,114 and 1,025 Euros, respectively.

The Most Expensive Houses in Germany

In contrast, the most expensive homes in Germany are located in popular and sought-after areas. For example, on the island of Sylt, a 400 square meter house with sea views sells for 15.5 million euros. In areas such as Berlin-Grunwald, Munich-Bogenhausen and Berlin-Mitte, house prices range from 10.8 to 13.5 million euros.

Buying a House in Germany with a Bank Loan

Buying a house in Germany with a mortgage (Hypothek) requires a 10–30% down payment and a bank loan for the rest. To apply, submit documents like employment contract, pay slips, bank statements, and property details. Banks assess your finances and property value before funding the purchase.

Additional costs include 3.5–6.5% property transfer tax, 1–2% legal fees, and 3–7% agent commission. German mortgages offer low interest rates (1–4%) and 15–30 year terms. Foreign buyers need valid documents and a credit history (Schufa) to improve loan approval chances. Compare multiple bank offers for the best deal.

Rent Prices in Germany

The price of rent in Germany depends on various factors including geographical location, type of property, size, and condition, as well as local market conditions. Here are the average rent prices in some major cities in Germany:

Costs to Be Paid for Buying Property in Germany

Buying property in Germany, like in other countries around the world, incurs additional costs apart from the main property value, which we will introduce below.

Obtaining a Property Loan in Germany

Obtaining a property loan in Germany is an attractive option for investing in Germany and entering the German real estate market. German banks such as Deutsche Bank and Commerzbank offer mortgages to both domestic and foreign applicants.

In Germany, loan interest rates are based on the central bank’s rates and vary by the applicant’s financial status. Foreign buyers must provide financial documents, a minimum 20% down payment, and proof of income and employment to secure a loan.

Additional costs include property transfer tax (Grunderwerbsteuer), notary fees, and agent commissions. A German bank account, proof of property ownership, and compliance with purchase regulations are also required for mortgage approval.

Real Estate Purchase Websites in Germany

Here are some well-known property buying websites in Germany:

• Immonet
• Immowelt
• Zillow
• immobilienscout24

Property Purchase Laws in Germany

There are no restrictions for anyone to buy a house in Germany; the only prerequisites are having sufficient money and a valid passport. With these two factors and following the legal process of buying property in Germany, you can become a homeowner in this country. The laws for buying a house in Germany are the same for all German and non-German citizens as follows.

• The homeowner is obligated to pay the property tax one month after purchasing the house. The property purchase tax rate is around 3.5% to 6.5% of the property’s price.
• The German government has considered low-interest loans of about 1.2% to 2.5% for homeowners looking to purchase property. Depending on the residency status, homeowners may benefit from these loans. It should be noted that these loans are available to those who earn more than 20,000 Euros annually.
• When signing the house purchase contract, the homeowner or buyer and their spouses must also be present.
• Please note that income generated from renting out the house will also be subject to tax.

Best Cities in Germany for Buying a House

Buying a house in Germany is possible for anyone, irrespective of their nationality. In large cities in Germany, most people live in apartments, while houses are more commonly found in suburban areas. While houses may be found in large cities, they are likely very expensive.

German people tend to buy properties for a lifetime, which is why it is important to look for properties in good locations with solid infrastructure, such as public transportation, schools, shops, job opportunities, etc. In the following sections, we will present the best cities in Germany for buying real estate.

Family Reunion Conditions in Property Purchase Residency in Germany

In Germany, purchasing property alone does not lead to residency; however, if residency is obtained through other methods such as investment visa in Germany or residency through company registration in Germany, you can benefit from the family reunion conditions (Familiennachzug). The conditions for family reunion for this type of residency depend on the following:

1. Eligible Family Members

• Spouse: Must be in a formal and registered marriage.
• Children under 18: If your children are unmarried, they can join you.
• For parents or other family members, reunification is only possible in exceptional cases and for humanitarian reasons.

2. Necessary Conditions for Family Reunion Application

• Your valid residence: You must have a legal, long-term residence permit (such as an investment visa or permanent residence).
• Financial stability: You must show that you have enough income to cover your living expenses and that of your family (without the need for government assistance).
• Sufficient living space: You must provide proof that you have adequate housing for yourself and your family members.
• Health insurance: All family members must be covered by German health insurance.
• German language skills for your spouse: Your spouse must provide at least a German language certificate at level A1 (in special cases, such as having a higher education degree, this requirement can be waived).

Right to Work with Property Purchase in Germany

Purchasing property in Germany does not automatically grant you the right to work in the country. Buying a house is considered a financial investment and has no direct relation to obtaining a work permit.

To receive a work permit in Germany, you must meet one of these conditions:

• Work visa: If you find a job in Germany and an employer hires you, you can get a work visa.
• Investment visa: If your property purchase is part of a larger investment (such as registering a company or setting up a business), you may be granted a residence and work permit.
• Long-term residence: People who have permanent residence in Germany or are citizens of the European Union can work without restrictions.

In summary, buying property alone does not allow you to reside or work in Germany unless combined with other methods (such as investment or starting a business).

Factors Affecting House Prices in Germany

In Germany, several factors can affect house prices. These factors include economic, demographic, property rights laws, and urban planning policies. Some influential factors on house prices in Germany include:

1. Geographical Location
2. Size and Type of Property
3. Condition and Age of the Property
4. Amenities and Features of the Property
5. Demand and Supply
6. Economic Conditions
7. Local Laws and Regulations
8. Local Amenities and Services
9. Housing Market Characteristics

Obtaining German Residency Through Property Purchase

Buying property in Germany does not grant residency or citizenship directly. Residency requires registering the property purchase as part of a business or investment plan. To live in Germany, you must first obtain temporary or permanent residency through study, work, investment, or company registration before buying property. Unlike Germany, countries like Hungary, Greece, and Spain offer residency through property purchase. Property ownership in Germany supports investment but is not a standalone path to residency.

Frequently Asked Questions About Property Purchase in Germany

• Can you obtain residency in Germany through property purchase?

No, purchasing property in Germany will not result in residency.

• Can you benefit from bank loans for purchasing property in Germany?

No, you can only utilize banking services if you have residency in Germany and are employed in the country.

• What are the best cities in Germany for purchasing property?

The best cities in Germany for buying property are Berlin, Munich, Nuremberg.

• Is buying property in Germany a good investment?

Despite high property prices, buying property remains logical as real estate can be one of the safest long-term investments; why? Because demand for properties in urban areas has outstripped supply, and interest rates remain low.

In this article, we learned about the conditions for purchasing property in Germany. As repeatedly mentioned in this article, through this method alone, you will not obtain residency in Germany. The price of property in Germany will vary across different areas and depending on the size of the property. If you are also considering property purchase in Germany, it is good to know that the cities of Munich, Hamburg, and Berlin are among the most expensive in the country.

You can post your questions regarding this in the comments section below; also, if you contact the Malekpour Immigration Institute, our consultants will respond to you for free.