German Real Estate – Everything you Need to Know, Saving Taxes + More

Germany – You’re looking into buying a home in Germany? Investing in real estate? Here we give an easy, in-depth guide to everything you need to know about real estate, properties, and buying a house in Germany. Made for expats in Germany, or investors from abroad. There’s a lot you have to know about property investment in Germany. The laws are different, but there’s many ways to save on the purchase of your new home anyways. From tax optimization to understanding your purchase contract, and knowing where is the Grunderwerbssteuer is lowest.

Take for example the Berliner Testament, what is it? How do you use it to your advantage? This is why knowign the details of German real estate laws is so advantageous.

What you Have to Know Buying a House in Germany!

If you’re looking into buying real estate in Germany, there’s some details you have to know about. Germany has substantially different laws relating to real estate than other countries.  Therefore, to know where to save, what to look for, and the nitty gritty details, you have to get specific information. If you’re looking to invest, but don’t know where, our piece on the most expensive cities in Germany gives a run-down on the cities where you’re bound to lose the least, and win the most.

Saving Money

If you want to save money on real estate in Germany, you’ll need to optimize your taxes. There are many ways to do this of course, but we’ve taken a closer look at two important ones.

They are all summarized in an article outlining everything you need to know

How to Pay Less with an Immobilien GmbH

An Immobilien GmbH is, translated, a company created for the purpose of organizing or managing real estate. This is a handy tool to use in the case that you would typically pay a considerable amount when you own property privately. Private leasing translates to a tax rate of 42 percent, meaning you can quickly pay 4-digit sums a year in taxes.

Immobilien GmbH – Tax Optimization in Germany

Saving Taxes with a Foundation

Another way to save money on German real estate is by founding what is called a ‘Familienstiftung’. This allows the owner of a property to reduce the amount of taxes which they are required to pay on the income they make from renters.

Familienstiftung – German Real Estate Tax Tricks

Grunderwerbssteuer

Buying property in any country means paying taxes on the purchase. In Germany, the tax on buying real estate is called Grunderwerbssteuer. Consisting of the words Grund (land or property), Erwerb (purchase), and Steuer (tax), this would be the equivalent to the American transfer tax. Who pays this tax, how much it is where, etc. is all in our article

Grunderwerbssteuer – Real Estate Transfer Tax in Germany

Additional Costs

In Germany, as would be expected, the additional costs are different from the additional costs in the USA. Property investment therefore means different calculations and different things to watch out for. Notarization, commission, renovations, etc. all need to be taken account.

Additional Costs & Hidden Fees – Real Estate Germany

Contract Details

Buying a house means drawing up and signing a contract. A purchase contract regulates the transfer of ownership. This, as with everything else has different ins and outs in Germany than in other places. We took a look at the BGB (the German Civil Code) so you don’t have to.

Purchase Contract – Details for German Real Estate