Tenancy Rules - How to achieve maximum yield
Acquisition Cost when buying property in Germany without Agency 5.5%
- 6% (infoberlin.org)
Property Acquisition Cost with
Agency 13%
- Notary Fees: 1% of sales price
- Property Acquisition Tax: 4.5%
- Stamp Duty / Property Registration Fees: aprox. 0.5%
- 1% + 4.5% + 0.5% = 6%
- Estate Agents - Broker Fees: 6% + VAT = 7.14 %. (our
properties are free of commission)
Notary Fees: 1% of sales priceThe Notary fees depend mostly on the
kind of services you need. For example, translations and notary escrow accounts
carry separate fees.
A public notary will check whether there are any
restrictions on the sale and use of the property. First, the Notary emails a
draft of the contract to the buyer, then buyer and seller sign / exchange
contracts if both parties agree to the terms, and then the notary submits the
change of ownership to the government books and the transaction is noted in the
land register.
German law requires the notary to be impartial and not
represent neither the buyer, nor the seller. The notary must ensure that the
buyer understands the conditions of the sales deeds and will answer any
questions you might have. Therefore, a notary can require for a translator to
be present. We can recommend notaries who are familiar with foreign languages
and who are happy to provide a transcript of the contract in English.
At
the signing of the contract, the terms are read aloud in German. The buyer has
the right to interrupt the proceedings in order to clarify any part of the
contract and a foreign buyer also has the right to have an interpreter
present.
You do not have to be physically in Germany to proceed with a
purchase. As a matter of fact, a 3rd party can sign on your behalf as absentee,
then you receive the documents by post for notarisation. Ideally this should be
done at the German embassy or consulate in your home country.
Official
identification papers (passport or ID card) are required and the property
changes hands as soon as a notary submits the contract to the land register
(Grundbuch) of the buyer.
Fiduciary / Escrow Account:
The
notary can request the use of an "escrow account" for an extra fee. The escrow
account belongs to the notary who acts as an escrow, which means that instead
of paying the seller, you send the funds to the notary who will release the
funds once certain conditions have been met. This is only necessary if the
property has an incumbent debt that needs to be cancelled first.
Do
you need a lawyer / solicitor to purchase a property ?
No, you do not
need a lawyer to purchase property in Germany. German law requires the notary
to be impartial and not to represent neither the buyer, nor the seller. Most
buyers choose not to instruct a solicitor when purchasing property in Germany
because the notary system is very secure and the solicitor would be doing
anything else that the Notary hasn´t done already (like checking the land
registry details). So at the end, you´d be paying twice for the same
service.
Foreigners Buying and Selling Property in Germany
Anyone with a valid passport and adequate funds may buy property in
Germany. The same rules apply to foreigners and nationals, residents or
non-residents. There are no restrictions whatsoever. Non-residends (Germans or
foreigners living abroad) might find it more difficult to get a mortgage or bank loan for property acquisition - but
that´s the only difference.
Property Acquisition Tax: 4.5% of the sales price.Property acquisition
tax is a fee due from the purchase of property. This tax is 4.5 percent of the
purchase price. Once this tax is paid, the tax office will issue a clearance
certificate. The transfer of ownership of the property from seller to buyer is
impossible without this property acquisition clearance certificate which is
being sent to the notary automatically without anybody intervening.
Property Registration Fees / Stamp Duty: approx. 0.5% of the sales price.
Estate Agents - Broker Fees: 6% + VAT = 7.14% of the sales price.
Properties may be sold privately or with the help of estate agents. Agent
commission is due when you sign the notarised sales contract. When you are
enquiring about a property which is being sold by an individual you should
stick to that and not pass on your personal details to agents. If you happen to
enquire with an agency even though you have already had direct contact with the
seller, then the estate agent´s broker fees can still apply.
Cost of selling of your property: none - tax free after 2 or 10 years of
ownershipIn Berlin, all fees associated with the selling and buying of a
real estate property are to be paid by the purchaser, unless otherwise agreed
in the sales contract.
Understanding property taxes is important when
selling property:
* If a property is sold less than 10 years after the
purchasing date, any profit made by owning the property will be
taxed at your personal rate of income tax.
* After owning the property for
more than 10 years, any profit made on the sale of the property is
tax free for private individuals but taxed for businesses.
However, you can avoid the 10-year period if you used the property yourself
as your private residence. Then, you can sell tax free after just 2 years of
residence.
Please take note of our DISCLAIMER |
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