Disclaimer: This article is written for your information only. We try to provide correct information on these procedures but ADEN Immo is a real estate agency and speaks from their experience as real estate brokers only. We cannot be held liable for any mistakes or omissions in the current article. Thank you for understanding.

Buying property in Germany as a foreigner: an open option for foreigners

With a strong and stable housing market, unaffected by the 2008 recession, Germany appears to be a good opportunity to invest in real estate. There are no restrictions for non-nationals and non-residents to buy a property in Germany. Whether your fiscal residence is in another EU country or abroad, you are entitled to buying property in Germany. However, you should keep in mind that:

• Owning property in Germany does not grant you the right of residence

• You will likely need to get a loan (mortgage) from a German bank or financial institution to finance your investment

• German banks and financial institutions often grant up to 50% of the property price to foreigners (i.e. people whose fiscal residence is not in Germany)

• Germany has passed fiscal conventions to prevent double imposition with a number of countries around the world, but not all (see our article on the fiscality of real estate in Germany to find out more about fiscal conventions)

Arriving in Germany: how to register and get a residence permit

Citizens of another EU country are entitled to work, live and buy property in Germany without needing to apply for a visa. This usually means having to declare Germany your fiscal residence by officially registering in two distinct locations:
At the local city hall, the Bürgeramt, to obtain a very useful document called the Anmeldung (or Meldeschein) which demonstrates that you are living in that city
At the local ministry of finance, the Finanzamt, to establish your fiscal residence in Germany, declare what your occupation is, and get a tax identification number

All foreigners from outside the EU who wish to stay in Germany for more than 3 months (the standard visitor permission time) will need to apply for a residence permit (the Aufenthaltstitel). Keep in mind that a visa is not quite the same as a residence permit: a visa is usually issued for a limited period of time, with a specific occupational purpose such as being a freelancer in your discipline. Citizens from specific countries, such as the USA, Canada, Australia, New Zealand, Japan, Israel, Switzerland and others, are allowed to enter Germany without a visa and apply for one while being in the country. Citizens from other countries usually need to apply for a visa from a German embassy in their home country.

Staying in Germany: how to get a visa

Being in Germany on a valid visa is the first requirement to being able to apply for a residence permit at the Foreigner’s Office, Ausländerbehörde.
• German Permanent Residency: a Permanent settlement permit (unlimited residence permit – § 9 section 2 AufenthG) in Germany can be granted after 3 years, if a full coverage of the applicants means of subsistence and a successful business can be demonstrated.
German Citizenship: naturalizing for Citizenship in Germany is possible after 8 years of continuous living in Germany, provided there are no criminal records, sufficient income and financial means to live in Germany, that taxes, pensions and health contributions have been paid, and that the applicant has sufficient knowledge of German.
• Business / investment residence permit: foreign entrepreneurs or freelancers who aim to start-up a business in Germany (or set-up a branch of their business in Germany) can obtain a ‘D’ visa, and later a residence permit through § 21 AufenthG if they invest a minimum of 200 000 euros and if they can prove that the business will have a “positive effect on the German economy” (source)

Frelance and artist visa (Visa for the purpose of Self-Employment): in Berlin in particular, there are a number of options available to obtain freelance or artists visa, which are usually granted for 1-2 years and renewable. Discover more on this guide by DispatchEurope or on the official Berlin website (in English!).

This article is written for your information only. We try to provide correct information on these procedures but we are not immigration lawyers. Please refer to the appropriate government agencies ! The law firm Citizen Lane offers interesting support in this domain (link: http://citizenlane.ch/residence-by-investment/germany/)

All in all, buying a property in Germany does not qualify you for a residence permit! It is also difficult to say if owning property in Germany might help you renew a temporary visa towards obtaining permanent residency. We advise you refer to an immigration lawyer when your visa is due to renewal in order to put all chances on your side. Indeed, Germany is an attractive place t live and the German real estate market remains an interesting investment opportunity for foreigners. Find out how to buy a property in Germany in our full guide!

There are no restrictions for non-nationals and non-residents to buy a property in Germany. In most cases, foreigners will have to take a mortgage with a German bank. Getting a mortgage from a European bank, while technically possible, is very unusual and difficult. But there are a good number of choices to get a mortgage with a German bank (called a Hypothek). This article walks you through the main types of mortgage in Germany for foreigners.

Disclaimer: ADEN Immo provides this content for your information only and has made every reasonable effort to be factually accurate based on our experience as real estate brokers. ADEN Immo disclaims any and all liability for damages incurred directly or indirectly as a result of errors, omissions or discrepancies.


How to get a bank loan/mortgage from a German bank?

You don’t legally need to be a resident to open a bank account in Germany. But non-residents usually get offered lower amounts, around 50% of the property price. This mean that you may need to pay up to 50% of the property upfront, which can be quite a sum! For German residents, the amounts differ in each situation, and banks will fund up to 80% of the property price.

The four largest banks in Germany are Deutsche Bank, Commerzbank, Postbank, and Hypovereinsbank. All of them offer mortgages, but it’s good to check the small print as each package differs slightly. Most banks also have an online mortgage calculator, which can give you a better idea of the interest rates and fees. Make sure to ask if they have an English-speaking counsellor to help you!


Making a downpayment

In the process of buying a property in Germany, once you have a clear project in mind, it is good to get a mortgage agreement ‘in principle’ from different banks. This will give you a better idea of what you can afford and will improve your profile in the eyes of sellers.

Foreigners are expected to provide a rather large part of the property price on their own. Most banks will ask for up to 50% of the property price upfront! Especially in large cities like Berlin, the government wants to reduce real estate speculation and encourage property sales for long-term residents, so they make financing more difficult for non-residents. If you are transferring your down-payment from a foreign currency, make sure to check your exchange options! Some external institutions (like TransferWise) offer interesting options to transfer money from one currency to another.


Taxes and fees

Keep in mind that in addition to the price of the property, the buyer will have to pay an additional 15% in fees and taxes. Most of these side costs are deductible from your income tax if your fiscal residence is in Germany. The side costs of a real estate transaction in Germany include:

  • Real estate transfer tax (Grunderwerbssteuer): depending on the federal state, these vary between 3.5 and 6.5% (6% for Berlin-Brandenburg)
  • Notary fees: around 0.5%
  • Registration fees (Grundbuch): around 1%
  • Real estate agent (Makler) fees: usually around 6% + tax, for a total of 7.14%

Graph showing the complete costs of a real estate transaction

Graph showing the complete costs of a real estate transaction


Types of mortgages in Germany for foreigners

Keep in mind that getting a mortgage with a German bank is a legally binding agreement. Failure to repay a loan may have hefty consequences, such as the repossession of the property by the bank. In Germany, individual credit scores are closely monitored (also known as the Schufa).

The German housing market barely suffered the 2008 financial crisis, probably because German banks are quite conservative with their lending policies for mortgage in Germany for foreigners. Both the property and the mortgage-taker are evaluated by the lender. They will look into your income, savings, and employment history (being self-employed or in a short-term contract could be obstacles). Age is also a factor (being close to retirement age is considered a higher risk).

Make sure to get offers from several banks and read the contracts with a legal expert before engaging into a mortgage. Last but not least – if you live in Germany and are a German tax payer – there are several state supported programmes that can come in useful should you wish to buy a property or build your own. Find out more detailed information in this useful article from How To Germany about mortgage for foreigners.

Curious about the transaction process of a property sale in Germany? Check out our complete guide to buying a property in Berlin as a foreigner!

The Real Estate Transfer Tax in Berlin

In recent years, the Real Estate Transfer Tax (Grunderwerbsteuer) has increased significantly and is now one of the principal sources of income for the federal states (the Länder). The Berlin metropolitan region, for instance, has seen the Grunderwerbsteuer increase from 3.5% to 6% between 2007 and 2014. Similarly, Northrhine Westphalia, the most populous state in Germany with close to 20 million inhabitants, has risen the tax from 3.5% in 2011 to 6.5% in 2015. Only Bavaria has remained at 3.5%.

The Real Estate Transfer Tax (Grunderwerbsteuer, in German) is one of the most important taxes in Germany. It is imposed on all real estate transactions, meaning that every apartment or house sold (privately) is subject to it. It is independent from other real estate taxes like the Grundsteuer, which is the local tax paid every year to the municipality. The Grunderwerbsteuer is owed to the federal states instead of the federal government. It is used to fund public projects like infrastructure, but also support to refugees and displaced people, for instance.

Graph showing the complete costs of a real estate transaction

The Grunderwerbsteuer (Real Estate Transfer Tax) amounts to 6% on top of the property price in Berlin-Brandeburg.

Role in the real estate transaction process

Although there have been scandals of real estate transfer tax avoidance in recent years (for instance in the sale of the Sony Centre in Berlin!) for private persons the payment of the tax is necessary to finalise a real estate transaction. Below are summarised the main steps in the sale of a property in Germany:

    • Offer is made to the current owner
    • Offer is accepted
    • Reservation is made through a real estate broker
    • Contract is drafted by a public notary
    • For two weeks (minimum), the contract is reviewed by both parties
    • Contract is read at the notary’s office and signed
    • Real estate transfer tax (Grunderwerbsteuer) is paid by the buyer to the Länd
    • Notary receives the confirmation and registers the sale in the cadaster  (Grundbucheintrag)
    • Buyer sends the total payment to the seller within 4-6 weeks

It is important to note that as long as the notary has not seen proof that the real estate transfer tax (Grunderwerbsteuer) was paid, he will not finalise the transaction. There are few instances when the tax does not apply. Only some specific circumstances are exempt from the Real Estate Transfer Tax:

    • inheritance cases, where property is transferred solely to one person or partially
    • divorce cases, where a spouses purchases the shares of the other partner
    • family cases, where the buyer is related directly to the seller
    • transformation from joint ownerships to individual ownerships

In the end, the Grunderwerbsteuer is applied by the acquisition of built or unbuilt land –this includes houses, apartments, cottages, as well as buildings. It is important to be aware of the real estate transfer tax when planning a real estate investment in Germany! Find out more about taxes, fiscal considerations and all other things to keep in mind in our GUIDE TO BUYING REAL ESTATE IN BERLIN.

Disclaimer: ADEN Immo provides this content for your information only and has made every reasonable effort to be factually accurate based on our experience as real estate brokers. ADEN Immo disclaims any and all liability for damages incurred directly or indirectly as a result of errors, omissions or discrepancies.





Can anyone buy property in Berlin?

There are no special requirements or paperwork required for foreigners wishing to buy property in Germany, even for non-residents. Since the housing market was largely unaffected by the financial crisis of 2008, it is a stable and reliable opportunity to invest in real estate in Germany! Whether you are looking to buy your own home or find an investment opportunity (Kapitalanlage), this article will take you through the key steps of buying a property in Germany as a foreigner. Want to learn even more? Join one of the Meetups from ADEN Immo broker Hélène Salvanes held every month!

Disclaimer: ADEN Immo provides this content for your information only and has made every reasonable effort to be factually accurate based on our experience as real estate brokers. ADEN Immo disclaims any and all liability for damages incurred directly or indirectly as a result of errors, omissions or discrepancies.

Defining your project

The first question is: what is your project? What is your budget? And most important: where? Because the real estate market in Germany is growing strong, it is good to have several ideas for a location. If you are looking into the real estate market in the German capital, check out our complete guide to buying properties in Berlin as a foreigner!

Are you buying for yourself? Are there already tenants living in the property? German law is very protective of tenants, so if you are looking for a new home, the best is to find an unoccupied property. However, investing in real estate is also a good option since most people in the country are renting their homes (especially in Berlin, where close to 85% of dwellers are tenants and not home-owners!)

Remember to study the plans and see if there are possibilities for new configurations.

Consider renovations! Some apartments may not look like they will fit your project at first. Maybe there are not enough rooms, or the bathroom is not functional… But with some imagination it might become your dream home! A 2-room 90sqm apartment can easily be turned into three rooms if the layout allows it. So take some time to look at the plans and make sure to double check the actual surface of the property with the plan.


Finding properties in Germany

Give yourself time! Most Germans who buy a property typically stay for a long time. In attractive areas, the turnover can be quite low, which means you will need at least a few months to find a home you like.

So how to find a property for sale in Germany? Properties can be sold either through a private person or through a real estate agent (the Immobilienmakler, or simply Makler). It is usually the task of the buyer to find a property they like and then contact the sales agent or the owner directly. If there is an agent, it is important to find out who will pay the costs of that intermediary! Fees are usually 6% of the property price plus taxes (for a total of 7.14%). You can check the background and reliability of a Makler through the IVD, the national association of German realtors.

Properties may have a notice board in the window advertising that they are for sale, but this is not always the case (and hard to spot!), so the most comprehensive way to search is either through agencies or through online portals. As in most European countries, you can find ads for real estate online. The main ones that can help you buying real estate in Germany as a foreigner are:

Ebay kleinanzangen

Don’t forget to create email alerts and check the platforms every day! If you don’t have time, consider hiring a real estate agent who will conduct the search for you and tap into their exclusive databases to find good options for your project.

Before asking for visits, make sure to examine the plans of the apartment carefully: it could save you the time of a visit and some disappointments! If you don’t live in Germany, it could still be a good idea to make the trip before signing a sale contract: meet the agents, meet the owners, find a notary, get a feeling for the place… 

Curious about the transaction process? Wondering about the fees and charges that the buyer will have to pay when buying a property in Germany? find out more in our complete guide to buying a property as a foreigner in Germany!

Our social networks

Find our favorites in preview and our real estate advices on our networks


Real estate experts in Berlin and Paris

ADEN IMMOBILIEN is an international team of experts focused on real estate in the German and French capitals.

ADEN IMMOBILIEN is your reference for properties in Berlin and Paris: sales, rentals, new development projects and buildings.