Living comfort and a prestigious effect

A villa means exclusive living comfort and a representative effect to the outside, a special challenge for real estate agents, or luxury agents. In addition, a villa is interesting as an investment property. The term villa originates from Roman times and means manor house. Today, not every villa is also a luxury object. Sometimes country houses located in urban centers are also called villas. In any case, villas are distinguished by their size, by a characteristic room layout, as well as by the land areas surrounding them.

In any case, there is a need for villas in today’s real estate market. Prices for these properties have risen sharply in recent years. The most sought-after villa locations are located in the catchment area of large cities.

Buy a villa? Our most exclusive properties

Our most exclusive properties you will actually not find online in our real estate portal. Celebrities, industrialists, sellers from business and media are looking for discretion and therefore rely on real estate experts with an internal circle of buyers and filtered communication channels. Are you looking for a villa in Germany, Europe or the USA? We have first class properties that you will not find anywhere.

• Off Market Properties
• Contact

Price development of luxury villas: Low interest rate phase

Since villas are highly sought after, especially as investment properties, and many investors are investing in real estate due to the period of economic recovery and low interest rate policy, the prices of these properties have also increased enormously. Over the long term, however, this price trend is by no means exceptional. Since 1975, real estate prices have risen only moderately. Towards the end of the last century, prices fell somewhat, but since the economic upswing they have been on the rise again.

Villa as a purchase object: Invest, instead of “only” live

In which real estate to invest? From an investor’s point of view, the villa has a special significance. It serves primarily as an investment object.

Secondarily follows the own use as a residential property and in many cases the new owner rents the villa. In vacation regions these objects are often rented out as vacation homes. This means that income can also be generated from the purchase of a villa. Indeed, the maintenance of these properties is also associated with high costs.

Checklist: Construction, extras and security

Basically, several components play a role in the purchase of a villa. These include, among others and very roughly simplified:

• Location of the property
• Property
• Living space
• Main house, if necessary adjoining houses
• Height of the rooms
• Furnishings and extras
• Security and accessibility

Location: the most expensive neighborhoods

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Many villas or country houses are located in the periphery. Whether in Berlin, such as Grunewald or in Los Angeles Beverly Hills. There, therefore, a high degree of mobility is necessary for residents. Some villa colonies, on the other hand, which are mainly found in large cities such as Paris are very centrally located.

The upscale residential environment, where most villas are located, is the decisive factor for a higher purchase price. However, the plot on which the property is located is also crucial. The property serves as an individual leisure oasis. It is private and therefore does not have to be shared with anyone.

Luxury you have to be able to afford

However, the disadvantage of this is the high cost of maintaining the garden area. Often, a separate gardener must be appointed. A villa is also characterized by its spacious room layout. These rooms can be adapted to individual needs. Here too, however, it must be remembered that the maintenance and cleaning of these rooms involves a lot of effort. Most villas are equipped with relatively high rooms. They convey a feeling of individual freedom. Their flood of light gives a feeling of well-being. However, the disadvantage of this is the high heating costs

Tip: If you come at this point already in the calculation, buy rather a number smaller! Here you can find my guide: Buy a house.

A villa is great for customizing. If several people occupy the property, so everyone has his own retreat there.

Villa as a rental property: Rent instead of buy?

If you want to buy a villa, you can consider renting out the property. This is an additional income opportunity that justifies the investment costs, at least in the medium term. However, there are tax issues to consider here.

Rental agreements offer tenants certain freedoms with regard to the interior design and the layout of the outdoor facilities. In the case of vacation villas, individual use is particularly interesting for vacationers. These villas are mainly located on the North Sea and the Baltic Sea. Also islands like Sylt or Helgoland offer villas as vacation domiciles. Many investors use the opportunity to buy a villa in such locations and rent it to tourists. When buying a villa, it should be noted that the investment must be planned very carefully due to its size.

• Reading tip: Renting from the apartment house

First, you should in any case assess whether an object offered for sale is really a luxury property or a villa. The prices for these properties are significantly higher than for normal objects. Whether it is a luxury property, describe the following criteria:

• The exclusive location
• A generous equipment
• The presence of special details

When is a villa a villa? Assessment

An exclusive location is particularly when the property is located in an upscale residential environment or in a special area. This includes islands, properties with sea views or properties in central locations in large cities.

Well-equipped villas also have their own pool area, a large terrace and a well-kept garden. Fitness rooms or a covered swimming pool can also be part of the luxury equipment. Special details are, for example, the provision of house staff or a gated community. This is a residential area with restricted access. However, this still has secondary importance in Germany.

Evaluation of the property: house or apartment building

• Valuing a house
• Valuate multifamily house

Costs: purchase price and incidental purchase costs

When selling a property, there are also costs that both the buyer and the seller have to pay.

Who pays which incidental purchase costs?

Explained in Quick:

1. Realtor – Under the new Real Estate Realtor Act, the cost of the broker is split 50/50 (buying from a private party); previously only buyers
2. Notary and land registry pays buyer
3. Property transfer tax pays buyer

This means that if you buy the property privately, under the new law – with reservations – the cost of the real estate agent would be divided in half. If, on the other hand, you buy through a company, such as a family office, the distribution is freely negotiable. In 98% of cases, however, the costs are borne by the buyer of the villa.

Checklist of ancillary costs: expert opinion to notary

These include, first and foremost:

• Value appraisal
• Energy certificate
• Broker’s commission
• Property transfer tax
• Speculative tax
• Notary and land register

The energy certificate, the real estate acquisition tax, the speculation tax and the notary fees are mandatory. The value appraisal and the broker commission are optional if these services are commissioned.

Individual cost factors

Most other items depend on the price of the property and vary individually. A speculation tax is incurred if the property is resold within a certain time after purchase. The tax authorities then access the profit made.

Notary fees and land register

The notary fees in Germany amount to 1.5% to 2% of the notarized sales price. In most cases, only the buyer of the property bears the notary costs.

Who bears the costs?

As a rule, the buyer.

Property transfer tax of the federal states

The real estate transfer tax is divided between buyer and seller and amounts to between 3 % and 6.5% of the notarized services for land and building, depending on the federal state.

Who bears the costs?

As a rule, the buyer.

Energy certificate and landlord info

The Energy certificate is prescribed at $ 300 for a simple certificate and $ 500 for a detailed certificate.

Who bears the costs?

As a rule, the seller.

Tip. Here we have collected for you various basics for renting. What else is important, besides the energy certificate?

Broker commission and cost allocation

The brokerage commission varies by state and ranges from 5.95% to 7.14% of the agreed sales price. The bearer of these costs is either the buyer or the seller, depending on the constellation. In some cases, these costs are also divided proportionately.

Tip. The commission amount is negotiable.

Who bears the costs?

As a rule, the buyer.

Buyer Tips: Owner occupancy / rental

1. Buy a house
2. Buy a multi-family house

Own use: buy a house

Buying luxury real estate – How many luxury properties are sold each year in Germany? There are less than 400.The market is extremely exclusive. Good contacts, a long-standing network, discreet offers and inquiries. Welcome to the world of luxury real estate. We show you how many square meters you get for your money. In New York, Berlin, Hamburg, Tokyo and Dubai. Buy and sell in the most expensive cities in the world.

• Buy a villa for the family

Build or buy?! Apartment houses

Your idea has manifested and your dream of a house is becoming a reality. You’ve already looked at a few properties, compared prices and budgeted for your home purchase. Before you enter into closer negotiations with sellers or reserve a property, you should plan your home financing and determine your terms. The more professionally you proceed and the more concretely you plan, the less complicated the house purchase will be, from the idea to the financing to the notarization to the conclusion of the contract. Then everything is ready for the renting from multifamily house.

• Build or buy?! Apartment houses

Alternative: buy exclusive condominium

The decision to buy a condominium (ETW) is made by most buyers for two reasons. The buyer wants to use the apartment to live in it himself. Other buyers are looking for a financial investment that will provide a good profit in the medium or long term.

• Buy an exclusive apartment

First time selling a villa?

If you’re facing selling a villa for the very first time, you’re probably asking yourself the typical questions that come up in any house sale and a few more. Especially if you are looking to sell an inherited house or villa and accordingly have no prior experience in real estate, here’s a little insight into the process and the costs you will face as a seller.

When selling a property, there are also costs that both the buyer and the seller have to bear.

Tip. We get the optimum out for you as a seller

Here you can find our contact persons: Contact.

You as a seller know that renowned real estate agents, like ours, take over the entire sale and process from valuation to exposé to notary and purchase contract. The most asked questions refer therefore, at the beginning, almost always to the cost factor with the mansion sales. Let us therefore start with this question:

Who pays which ancillary purchase costs?

Explained in Quick:

1. Real estate agent – Under the new estate agent law, estate agent costs are split 50:50 (buying from private); previously only buyers
2. Notary and land registry pays buyer
3. Property transfer tax pays buyer

Checklist sale: cost factors

These include, first and foremost:

• Value appraisal
• Energy certificate
• Realtor’s commission
• Property transfer tax
• Speculative tax
• Notary and land register

The energy certificate, land transfer tax, speculation tax and notary fees are mandatory. The value appraisal and the realtor’s commission are optional if these services are commissioned. Most of the other items depend on the price of the property and vary individually. A speculation tax is incurred if the property is resold within a certain period of time after purchase. The tax authorities then access the profit made.

Notary fees and land register

The notary fees in Germany amount to 1.5% to 2% of the notarized sales price. In most cases, only the buyer of the property bears the notary costs.

The notary fees and land registry are usually paid by the buyer.

Property transfer tax when buying a villa

The land transfer tax is divided between buyer and seller and amounts to between 3.5% and 6.5% of the notarized services for land and building, depending on the state.

The notary fees and land register is usually paid by the buyer.

Energy certificate for all properties

The energy certificate is prescribed with $ 300 for a simple certificate and with $ 500 for a detailed certificate.

The cost of the current energy certificate is usually borne by the seller.

Realtor costs

The realtor commission varies depending on the state and is between 2 % and 7 % of the agreed sales price. The bearer of these costs is either the buyer or the seller, depending on the constellation. In some cases, these costs are also divided proportionally. Tip. The commission amount is negotiable.

As a rule, the buyer bears the realtor costs.

Properties with multiple owners

The situation becomes somewhat more difficult when a property has multiple owners.

Especially in the case of villas, this can be the case. If the property is sold, it must always be unanimous among the owners. If this is not the case, the owner who wants to sell the property must bring a partition action.

Action for partition is time-consuming and costly

Heirs: community of heirs and fractional community

Villas are often real estate that has been inherited. Therefore, it may happen that several heirs are registered in the land register. If this is the case, the owners are listed in accordance with Section 47 of the Land Register Code. Their shares are levied ideally. If several owners are registered, this is a community of heirs in accordance with §§ 741 ff of the German Civil Code.

In the case of a community of heirs, the situation is somewhat different. If an heir brings a partition action, the property is put up for auction and the respective heir receives only his share of the sale proceeds. In the purchase agreement, all shareholders on the seller’s side must be mentioned by name. The respective share ratios are also listed in the purchase agreement. This is particularly important for the sellers, because the proceeds of the sale will be divided among them on a pro rata basis after the sale.

For the buyer of the property, on the other hand, this circumstance plays no role. However, problems could arise during the notarization process. Especially if one co-owner is represented by another at the notary appointment. In this case, a written power of attorney is required in any case.

Inherited a villa? Read more on the subject here

• Property and inheritance

Divorce: sale after separation

If married couples are indicated in the land register, it is to be assumed that they can sell the property only jointly. This occurs primarily in the case of divorce. The legislator assumes that both spouses have tacitly concluded a joint ownership agreement when purchasing the property. This is regulated in Section 749 (II) of the German Civil Code.

If one spouse is registered as the sole owner, he or she can also sell the property alone. The non-registered spouse only has to agree if the property is the entire property of the marital community. (§ 1365 BGB).

Selling a villa after divorce? Read more about the specifics in the topic here:

• Property and divorce

Vendor Tips: Owner-occupier/landlord

Want to learn even more about selling real estate? Read more about houses and apartment buildings here, depending on what type your villa is, there are specifics to consider here as well.

1. Selling a house: Villa for one household
2. Multi-family house: villa for several parties

House for sale: Villa for one household

Single-family houses are characterized by the fact that they are inhabited only by one family, a couple or a person living alone. They have a garden, which is also owned by the owner. Not all single-family houses are inhabited by their owners. There is also a possibility to rent a family house with a garden. In almost all federal states, single-family houses enjoy great popularity as a form of housing. Accordingly, there is a great demand in the real estate market.

• Sell your house

Multi-family house: villa for several parties

If you should decide to sell your house privately, it means a lot of time investment. From the appraisal to the creation of the exposé, to customer approach and sales phase, months pass without market knowledge. In all areas, above all, the location counts, not only in the sale of apartment buildings.

• Sell your aparment house

This city article is part of our full size guide: Buying a House

New York Real Estate – How to Buy a House in NYC

Perhaps the most famous city in the world, New York has everything going for it. An incessant economy, endless museums and creative opportunities, neighbourhoods for every taste, and an undoubtable atmosphere. Buying real estate in New York is, for that reason, so popular and lucrative. The real estate market, as we will see below, is an opportune chance to invest safely with high profits. So, with relatively low interest rates, the lowest property tax rates in New York State, and seemingly impossibly low prices, now is the time to invest in New York real estate!

• Rather buy an apartment in New York?

Largest House in USA – New York Mega-Mansion

One of the most expensive houses in the whole of the USA, 281 Daniels Lane is a bigger house than you could imagine. Built by multi-billionaire Ira Rennert, this massive compound has multiple houses and sits on 63 acres of waterfront property. If you want to get an impression of how luxxurious and opulent this self-made entrepreneur lives, you should know that his neighbours commonly complain about the noise of the oversize helicopter which lands on the designated helicopter pad on the property.

The massive mansion boasts multiple dining rooms, a gym, two tennis courts, three swimming pools, a bowling alley, a movie theater, a private museum showcasing the billionaire’s massive art collection, and a basketball court.

• Location: 281 Daniel’s Lane, 11962 New York

What is New York’s Biggest Economy?

New York is perhaps best known for its legendary finance sector. Countless mammoth banks have their headquarters here, and ‘wall street’ is known worldwide for its trading business. Yet New York is also home to a billion dollar port, being the source of thousands of jobs. It is also a major hub for manufacturing of textile and clothing industry. More importantly though, New York is a young tech-hub. With many software and new-tech startups and companies being housed in the metropolis. Lastly, with the city being one of the biggest in the U.S., and most popular worldwide, New York also has a massive gastronomy and hotelier sector, with tourism pushing a large proportion of it.

• Tech
• Finance
• Tourism

Is New York’s Economy Growing?

New York’s economy is growing. Between 2001 and 2019, the city’s GDP rose from $1,20 tril. to $1,57 tril., a 24% increase! There are some 70.000 businesses in New York City, and this number is growing annually. New York’s real estate market also makes up a huge share of its massive economic growth.

• GDP: $960,25 bil. (8% of total U.S. GDP)
• Past 20 years, 24% increase.

Is it a Good Time to Buy a House in New York? – Real Estate Market

Right now is a very good time to buy a house in New York. Low prices are almost certain, thanks to many vacancies by lettors who are no longer interested in renting out the very low rent prices. That means prices will be low, but thanks to New York’s legendary status, and cramped market, the prices are certain to pick up again. In a few years, the current prices will have multiplied, meaning an investment now will reap profits. Prices of homes are expected to increase by 9.1% over the next year.

• Home Prices Currently Low
• Expected 9.1% increase in price

Home Price Trends New York City – New York Real Estate Crash?

It seems every year there is an impending real estate crash. Yet this has not happened until now. Some experts have warned again of a crisis, yet looking at the house price index for New York, there is no evidence. The opposite in fact, the rising house price index indicates not only a healthy economy, but also a strong real estate market.

• Strong real estate market
• Rising Price Index

Most Valuable New Constructions

This graph is perhaps indicative of New York’s real estate market. Only surpassed by Dallas-Fort Worth, and the Houston-Sugarlands areas, the New York metropolitan area is among the places with the highest value of new residential construction permits. That means that new constructions are valued very highly in New York, thanks to high real estate prices, which are, thanks to these expensive new constructions also expected to remain high.

• 3rd best in the Country!

New York Real Estate Prices

New York City’s average house has a value of $660.000. Last year the median sales price on single-family residentials hit $718.000. Additionally, the amount fo sales being completed increased by over 21% compared to last year. Per square foot, you can expect to pay $341, a number 2.4% higher than last year. Manhattan is the most expensive borough, with the hotspot’s averae sale price being ata $995.000.

• Average home: $660.000
• Average sqft: $341

New York Real Estate Market Explained

NYC is certainly a buyer’s market at the moment. There are more properties for sale currently, than there are buyers. Properties were being sold, on average, almost 3% below asking price, and were typically sold after a long 151 days on the market. This is likely also due to the high supply of properties making buyers be more specific in their wishes. Also, while it may seem like rental-heaven, New York is over 50% owner-occupied, meaning that you are not alone in owning instead of renting.

• New York’s Real Estate market in-depth: New York Real Estate Investment

Is it Hard to Buy a House in New York? – Problems

As mentioned, the New York market has many homes for sale, meaning that, apart from few issues, it’s not very difficult to buy a house in New York. Different from buying an apartment in New York, buying a house will likely leave you with a more specific and satisfactory property.

Where Can You Buy a House in New York? – Detached Single-Family Residences

You may think of New York as a place where you can only buy apartments or condos. This is not the case though, although detached single-family houses are quite rare in e.g. Manhattan. You will not have much difficulty finding a house in e.g. the southern parts of Brooklyn (Bensonhurst, Sheepshead Bay, etc.) as well as Queens (e.g. Forest Hills, Woodhaven, etc.). Of course the legendary Hamptons are also prime real estate.

What is the Minimum Downpayment on a House in New York?

Mortgage is always a major topic when buying a house in New York. Even here you will need to pay at least 20% on your downpayment. The FHA loans, which would allow you to pay as little as 3.5% without significant interest rates will be hard to find in New York, as there are so few houses compliant with the regulations. If you decide on a downpayment lower than 20%, you can expect high mortgage interest rates, and of course principal mortgage insurance. With a home price of e.g. $700.000, the classic 20% downpayment is a hefty $140.000!

Tax Tip: NY state will allow you to deduct much of your mortgage interest from your taxable income!

Taxes! Where to Pay and How

Taxes on buying a house in New York: this is the fun part. Taxes in New York are structured so that you are advantaged when you buy a home instead of rent. That means you can deduct many things like mortgage interest and your New York property taxes from your taxable income! More on optimizing your taxes in our article:

• Saving Real Estate Taxes

How Much Money do you Need to Buy a House in New York?

There are of course a million ways to save money everywhere on your home. From saving on your taxes when buying a home to government programs, you need to make sure to take a look at the possible programs for you in your income-, cultural-, and geographical region.

How to Pay Less when Buying a House in New York

For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.

• Less taxes for first-time homeowners

We have a full-size guide on all the additional costs you have to pay when buying a home:

Additional Real Estate Costs

Saving with Home Improvements

The planet is dying, and everyone has to do their part. That’s why many houses in New York nowadays are sold with eco-friendly upgrades already done. These include renewable energy sources such as solar power, or other variants such as more insulated roofing or smart thermostats. Having these can cut down on your recurring costs.

• Eco-friendly = Wallet-friendly

What you Need to Know About Buying a House in NYC

These are the top tips for buying a house in New York. You can be certain that if you adhere to these tips, you will have a good time, and end up satisfied homeowner of New York real estate.

People you Need to Hire to Buy a House

The most important step of the house buying step is the people who you will have fighting on your side. You want a group who are capable and empathetic. Additionally, you may need more people than you think. The list includes real estate brokers, agents, loan officers, mortgage brokers, and a real estate attorney. This is the step of the process where you will need to spend more time than you think. A good team surrounding your purchase will be a deciding factor in the quality of your home, as well as how much stress the home pruhcase will be to you.

• Real estate broker
• Agent
• Loan officers
• Mortgage broker
• Real estate attorney

It’s the Season – Spring

If you want to buy a house in Los Angeles, the time to do it is in the late winter to early spring. From January to March, the prices of homes are lower than the rest of the year, which means you can pay less for the same house that you would normally.

• Buy in Spring!

Location Location Location – New York Neighborhoods

Which neighbourhoods in New York to buy in? The old realtors adage, location location location. New York is home to five boroughs, all with a unique character and different qualities. Within these boroughs though, there is also large variation. For example, Brooklyn is home to some of the most high-end real estate areas in the whole city, while its neighborhood of Brownsville is considered the most dangerous. Therefore, which neighborhood you buy in can be decisive

Checklist – Where to Buy a House

What to look for in a location for buying your house? The location of a home, and the amenities nearby can decide your resale value, and can mean over- or under-paying on your house. This is our checklist of things you absolutely have to check out when looking at buying a house in a certain location:

• What are other homes or buildings on the block like? If
  neighboring homes or buildings are in poor condition, it could affect resale
  values.
• Schools: Are there good schools nearby? Do they have a good reputation?
• How close is the home to shopping areas such as malls? If you don’t have a car, public
  transportation? If driving, parking garages?
• What community amenities are nearby? E.g. museums, parks, restaurants, etc.

Don’t Forget Additional Costs

New York has an extra mansion tax, as well as a few other unique facets which make the additional costs here more difficult and sneaky. Be certain that you and your real estate broker have thoroughly discussed the details of all potential additional costs which you could face when buying a house.

• Real Estate – Additional Costs

How long a House has been on the Market – Beware of this

A major problem can often be unseen by you. Whether it’s shoddy renovation work which your inspector misses, a future construction project which could heavily affect resale value, or any number of things. Therefore it’s smart to always check how long a house that you are looking for has been on the market. Remember, in NYC, the average home is on the market a little under 5 months. Anything significantly longer than that can mean danger! It could also mean that a seller is just a particularly hard negotiator, and if you have the money to buy, it can still b the right purchase. So just make sure to take an extra close look.

• Hidden Problems!

Process Explained – How to Buy a House in New York

The process in New York is the same as for buying a house in the whole of USA. In short you save up, find the people that will help you through the journey, find your future home, and close on the deal. More specifically:

1. Save up for the Downpayment
2. Find a Mortgage Broker
3. Get Mortgage Preapproval
4. Get your Team Together: Attorney, Real Estate Agent, etc.
5. Start looking at Listings
6. Go to Viewings
7. Submit an Offer
8. Close

How Long does it take to Buy a House in New York

From start to end, the process is going to take a few weeks at least. The time can range anywhere from three weeks to three years, but on average you can expect about 6 months from start to finish. Remember! Even after closing it typically takes about 90 days before being able to move into the new property. Some people search for years and fail to find anything. In the end, how long you spend finding a new house depends on how well-prepared you are. On average though, in New York, people buying a house look for 50-70 days between starting the search and closing.

• 3 Weeks to 6 Years

Best Real Estate Agents in New York for Buying a House – Ranked

New York has more real estate agents than home buyers it seems. In this sea of real estate agents, all claiming to be the best, our ranking for the top 8 real estate agents in New York is below. These are NYC’s best realtors:

1. Richard Leasure (Howard Hanna Rochester)
2. John Farrell (EXIT Realty Homeward Bound)
3. Alexa Lambert (Compass)
4. Michael Kenduck (21st Century)
5. Bryan Karp (RE/Max)
6. John Lajara (RE/Max In the City)
7. Geraldine Andolina (21st Century)
8. Daniel Axtmann (Berkshire Hathaway)

New York City Explained

Counting the neighbourhoods, and finding out where one ends and another begins is a hard task in New York. The city is massive and spread out over 784 km² (303 mi²), being home to 8,4 mil. people.

• Pop. 8,4 mil.
• Area 784 km² (303 mi²)

New York’s Counties – Are NY’s Boroughs Counties?

New York City incorporates five counties, these are: New York County (Manhattan), Kings County (Brooklyn), Bronx County (The Bronx), Richmond County (Staten Island), and Queens County (Queens). In other words, each borough makes up one county.

• New York County
• Kings County
• Bronx County
• Richmond County
• Queens County

All New York Neighborhoods Mapped – Williamsburg, Midtown, etc.

With so many neighborhoods, it’s nice to see what neighborhood ends where. Where is the famous Williamsburg? See it all in the map below.

Property Taxes – New York’s Property Taxes by County

Buying a house in NYC means looking at how much you’re going to have to pay in taxes. With some districts paying more than others, this is an important part of your investment. New York property taxes are slightly more complicated than elsewhere, but broadly, the most you will be paying is in the Bronx, and least in Manhattan.

• Kings (Manhattan) – 0.65%
• Queens – 0.87%
• New York – 0.90%
• Richmond (Staten Island) – 0.91%
• Bronx – 0.97%

Neighborhoods in New York City – Where to Buy Real Estate

What neighborhood should you move to? Where are prices low, and likely to rise? These are the questions we answer here. Importantly, you will want to decide beforehand what type of neighborhood you’re looking for. There are young, trendy, and soon-to-be-gentrified areas like BedStuy, the super-rich luxury pads in Manhattan, or a little more suburban in Carroll Park or Park Slope.

New York Real Estate – Manhattan

Manhattan… Need I say more? A timeless and undisputed king in New York real estate. Neighborhoods to keep on your radar: TriBeCa, the perhaps most opulent part of New York City, or Upper East Side, which is the hottest tip in New York at the moment.

Bedford-Stuyvesant – Future Williamsburg

Williamsburg is perhaps the most famous example of gentrification worldwide. Not yet prey to gentrification is Bedforsd-Stuyvesant, where low prices, boundless amenities and a young atmosphere allow inhabitants to enjoy the big city, without its incessant tumult.

Park Slope – Where to Raise a Family in New York

Park Slope is already more famous than it was only two or three years ago. This is thanks to its near-perfect combination of proximity to the city, neighborhood safety, as well as a nice park and more. If you want to raise a family in New York City, this is where you should do it.

T

House & Buy a flat: Real estate investment

Many real estate buyers bring a lot of time with them, some of them need to move quickly. Career changes, spontaneous inheritance, but also tax aspects, such as profits at the end of the year to avoid tax, play a role for some property buyers.

Factor: Time, local knowledge and laws for owners

But it is not only the time that holds risks for many a real estate investor, the lack of local knowledge also ensures that the property search takes considerably longer than planned and causes considerably more sources of error. Sometimes expensive mistakes, after all you are moving in a new legal system (USA or Europe, or Germany).

Risk factors:

• Lack of time
• Lack of local knowledge
• New laws and taxes

Real estate yield: city districts in comparison

Some evergreen districts, mainly in the city centres, always pay off for real estate investors in the end. On the other hand, the return on the property is “only” moderate. If you want a higher property return, you have to go to Upcoming districts.

Some buyers, however, will by no means deal with the yield of a property, but first of all with the basics, the mistakes that can be made when buying a property, as well as the procedure, from the search, through the broker of the to purchase contract and notary.

Real estate special: USA, Germany (emigrants)

Hundreds of thousands immigrate to both countries every year, hundreds of thousands leave the countries and look for a new home. Career changes, as described in the introduction, the new love, a spontaneous inheritance or a blatant change of scene. It is not always about investment. This is another reason why our little guides are intended to provide a quick and clear insight into the megacities of both countries.

Example New York City

Here is a little insight into the city that never sleeps. Which districts do you need to know? Which taxes are important for real estate buyers in the USA? Even in the state of New York?

• Investment brochures

Each individual investment brochure is available in two languages, English and German. Tip! Among the individual investment brochures you will find more detailed information, for example on the square metre prices for condominiums and houses in the respective cities. You can find out about buying a house or buying an apartment free of charge from us at. Here you can access the respective overview, invest in the USA and invest in Germany:

• Investment brochures

Multi-family houses and renting

You do not want to buy only for your own use but would like to rent out parts of your property? Then there are once again very special requirements, laws and regulations that you need to know.

• Buy a multi-family house
• Build or buy an apartment building ?

Additionally, in the following there may be slight grammatical errors, as this article was written by a German tax expert. This does not detract from the quality of information.

Real Estate Sale & Purchase: Tax for House & Apartment

Depending on the situation, different taxes can be incurred when buying real estate. Taxes are levied at both federal, state, and local level. Therefore, the regulations also differ at federal, state or local level, and differ both in the basis of assessment and in the amount of tax rates and contributions. For the sale or buy of a house, an apartment, a multi-family house or just land.

Examples of real estate taxes:

• Real estate transfer tax (GrESt)
• Land tax (GrSt)
• Speculation tax
• Inheritance tax (ErbSt)
• Gift tax (SchenkSt)
• Turnover tax (VAT) & Trade tax (GewSt)

Real Estate Transfer Tax (GrESt): Change of Ownership of Real Estate & Land

The real estate transfer tax is a legal transaction tax, the one-time levying of which is usually triggered by the purchase of a plot of land or real estate. It is levied on the basis of classic purchase contracts as well as in the case of land exchange, contracts or divisions. Furthermore, changes of ownership within the meaning of real estate transfer tax can lead to a tax levy as a result of transfers as well as highest bids in compulsory auctions.

Trigger for tax levies on the basis of GrESt:

• Assignments
• Performance bids in foreclosure auctions

Tax Rates According to Federal States: Bavaria & Saxony with low tax rate of 3.5 percent

The tax rate is set nationwide and ranges – as of 2020 – between 3.5% and 6.5% of the purchase price. The basis of assessment is the purchase price as certified by a notary – it is multiplied by the country-specific tax rate to determine the amount of tax payable.

Current tax rates 2020 (lowest first):

• Bavaria: 3.5 %
• Saxony: 3.5 %
• Hamburg: 4.5 %
• Bremen: 5.0 %
• Lower Saxony: 5.0 %
• Rhineland-Palatinate: 5.0 %
• Saxony-Anhalt: 5.0 %
• Hessen: 6.0 %
• Mecklenburg-Western Pomerania: 6.0 %
• Brandenburg: 6.5 %
• North Rhine-Westphalia: 6.5 %
• Saarland: 6.5 %
• Schleswig-Holstein: 6.5 %
• Thuringia: 6.5 %

Tax Debtor, Tax Bearer & Tax Exemption – Nearest Relatives & Partner

In principle, buyers and sellers are equally affected by the tax liability. Usually, however, the payment obligation is transferred to the real estate buyer. In the course of settling the tax liability, the taxpayer receives a so-called clearance certificate from the tax office, which serves as the basis for the legal registration of the new owner in the land register.

Under certain conditions, the Real Estate Acquisition Tax Act (GrEStG) allows an exemption from the required one-off payment. This applies, for example, to property sales to family members in a straight line and spouses/life partners within the partnership or during the divorce or annulment process. Also exempt from the real estate transfer tax are real estate or plots of land with a maximum purchase price of 2,500 €.

Conditions for tax exemption:

• Parents and children or grandparents and children (kinship grade I)
• Spouses or registered partners
• Real estate/properties up to 2.500 € purchase price

In the case of taxable inheritances and gifts, the real estate transfer tax is completely waived in order to avoid double taxation.

Property Tax (Grund Steuer; GrSt) – Valuation, Tax Rates & Hebesatz

The property tax is a municipal tax, which is paid annually to the respective municipality in case of real estate ownership. A distinction is made between real estate tax A – agricultural – and real estate tax B – construction – since a special assessment rate applies to property used for agricultural and forestry purposes.

Assessment Basis, Valuation & Real Estate Tax Collection – New Reform 2024

Two laws are used to determine the value of taxable property: the Property Tax Act (GrStG) and the Valuation Act (BewG). The values necessary for the calculation of real estate tax are currently being reformed due to obsolescence and will be replaced by new values. This process should be completed by the end of 2024.

The first step will be for the state tax office to determine a value using the so-called capitalized earnings method. This involves both the actual value of the land and the type of development, location and size of the property.

Secondly, the value is multiplied by the corresponding tax index, which is directly related to the respective real estate object. For example, a flat rate of 6.0 per mille is calculated for agricultural and forestry property, whereas the per mille rate for building property is between 2.6 and 3.5.

Overview of tax rates by type of property:

• 6.0 per mille for agricultural property
• 2.6 per mille or 3.5 per mille for single family houses
• 3.1 per mille for two-family houses
• 3.5 per mille for the remaining building property

The final property tax is then calculated as the product of the property tax assessment issued by the tax office and the property tax rate. The rate of assessment is set by the municipality and is usually valid for a period of one year.

Tax debtor, Tax Bearer & Tax Exemption – Installment Payment, Own use & Third-Party use of Real Estate

As a rule, the tax debtor is the owner of the property – and in the case of own use – the resident. After appraisal and assessment, he receives a corresponding tax assessment from his municipality, which is binding for at least one calendar year. The legal owner at the time of 1st January of each calendar year is therefore considered to be the tax debtor, even if he/she resells the property in the meantime. Private law settlements can of course be made in favour of the real estate seller.

The payments concerning the property tax are generally made in four instalments per year, on 15 February, May, August and November. With small payment amounts between 15 € and 30 € half-yearly rates – in each case to 15 February and August – are usual, whereas with tax payments under 15 € annual rates to 15 August are felt as sufficient.

Installment payments of the property tax:

• Taxes > 30 €: quarterly (on 15.02., 15.05., 15.08. and 15.11.)
• Taxes 15 – 30 €: half-yearly (to 15.02. and 15.08.)
• Taxes < 15 €: annually (15.08.)

In the case of rented real estate objects, however, the charges can be passed on to the tenant(s) as apportionable service charges, provided that a corresponding contractual agreement has been reached in advance. Should a loss of rent through no fault of one’s own arise over large amounts, it is possible to submit an application to the local authorities for real estate tax remission.

Property owned by public authorities, church property and property owned by non-profit corporations are completely exempt from property tax.

Speculation Tax – Private Sales Transactions for Real Estate

The speculation tax is a tax which is imposed on a real estate salesman with private sales transactions according to nationwide regulation. In accordance with the German Income Tax Act (EStG), taxation is levied on all income resulting from private sales, with the exception of owner-occupied real estate.

Applicable Area & Due Date – Letting, Undeveloped Land, Heritable Building Rights & Co

Taxes must be paid on the sale of rented apartments and houses as well as on undeveloped land and further in the case of hereditary building rights. Also affected by the speculation tax are shares in closed real estate funds and further co-ownership shares.

Scope of the speculation tax:

• Letting of apartments & houses
• Undeveloped land
• Leasehold cases
• Shares in closed-end real estate funds
• Shares in co-ownership

The due date is the year of sale. The amount of tax payable is determined individually by the federal states and is based on criteria such as appreciation in value and the seller’s income tax rate, but may be reduced by certain expenses.

These include, for example, profit-reducing modernization costs – to the extent that they exceed 15% of the original acquisition cost -, certain advertising expenses, and brokerage and notary fees. By means of cleverly arranged installment payments, it is sometimes possible to take advantage of tax-free allowances to reduce contributions.

Reduction of speculation tax charges:

• Modernization costs > 15 % of acquisition costs
• Advertising costs
• Brokerage fees

Speculation Period – 10-year Period & Three-Object Limit for Real Estate Sales

The speculation period is 10 years. This means that all sales transactions under private law are exempt from speculation tax after this period. If, on the other hand, the apartment or house is temporarily used by the owner, the 10-year period can be circumvented and reduced to two to three years.

This is always the case if the real estate object was exclusively used for the own residential purpose in the year of the sale as well as the two preceding years – even in the case of owner-occupied second homes or vacation homes. As long as a real estate owner can prove that he receives child benefit for his children, their private use is also regarded as “own residential purpose” of the taxpayer.

If a total of more than three property sales are made in a five-year period and the three-object limit is thus exceeded, the sales are considered by law to be commercial transactions and are therefore automatically subject to trade tax.

Inheritance tax (ErbSt) – Property Valuation & Tax Allowances

Inheritance tax always comes into effect when a deceased leaves an inheritance which is accepted by the beneficiaries.

Assessment Basis & Taxes – Inheritance Taxes According to the Market Value on the Balance Sheet Date

In contrast to foreign states, the federal regulations define the inheritance tax here not as estate tax, but as inheritance accrual tax, which means that the tax charges are generally levied in relation to the specific amount of the inheritance. An extended tax liability ensures that beneficiaries do not benefit from migrating abroad in case of inheritance.

The German Real Estate Valuation Ordinance (ImmoWertV) provides a valuation based on comparative value, income value or real value methods. For real estate inheritances, the valuation is based on the current market value on the reporting date, i.e. the value that could have been achieved for the property in an immediate sale on that day.

In the case of leased properties, a flat tax valuation discount of 10% is applied, whereas 100% of the market value of non-leased properties is included in the valuation.

Assessment basis according to ImmoWertV…

• Rented properties: 90% of the market value
• Non-leased properties: 100% of the market value

The valuation report can be tax deductible as additional inheritance costs.

Tax Allowances & Tax Remission – Degrees of Relationship of the Heirs to the Testator & own use

The amount of the inheritance tax can be reduced by certain allowances. These are based on the respective degree of kinship between a beneficiary and the deceased.

Tax-free amounts according to the degree of kinship:

• 500.000 € for spouse / life partner
• 400.000 € for biological children, stepchildren, adopted children and surviving grandchildren
• 200.000 € for grandchildren
• 100.000 € for parents and grandparents
• 20.000 € for all other heirs (related and unrelated)

Law of the case, if the deceased was living in a property used by himself before his death and his heirs use this property for their own residential purposes for at least ten consecutive years after the occurrence of the inheritance, the inheritance tax is discharged. In the case of an early departure, however, subsequent taxation will take place.

Gift tax (SchenkSt) – Gift Contract & Tax Exemption

Gift tax is payable on assets that are given to the beneficiary instead of sale, loan or inheritance.

In the context of real estate gifts, the donors are often granted rights of residence and/or usufruct (use without altering). In these cases, a contract of gift is advisable, if necessary with an included right of reclaim, in order to avoid compulsory auctions or seizures in worst case scenarios. In the case of the guarantee of lifelong right of residence, a corresponding entry should also be made in the land register in order to provide clear evidence.

Tax-Free Amounts: Tax Remission – Degree of Relationship of the Beneficiaries to the Donor

Gifts to spouses or life partners are subject to complete tax exemption. This also applies if the partners are in the process of divorce or annulment, insofar as they still live together in the family home at the time of the gift.

The tax-free amounts in gift cases can be re-credited every ten years. In the case of parents, this is even possible twice. They differ with regard to the family relationship between the donor and the recipient.

Tax-free amounts according to family relationship:

• 500.000 € for spouse / life partner
• 400.000 € for children and surviving grandchildren
• 200.000 € for grandchildren
• 100.000 € for parents and grandparents
• 20.000 € for all other beneficiaries (related and unrelated)

Claim for Compulsory Portion and Supplementary Claim in Case of Donation & Inheritance

In the event of exclusion of the inheritance, the deceased’s next of kin are entitled to a so-called compulsory portion, i.e. a claim for payment against the testamentary heirs.

According to the German Civil Code (BGB), gifts made by a deceased person in the last ten years prior to his or her death are counted as a supplement to the right to a compulsory portion for his or her heirs when the case of inheritance arises. In accordance with the meltdown model, the entitlements decrease from year to year and fall to zero percent from the eleventh year before the inheritance.

Gifts made within a marriage or registered civil partnership are entitled to a supplement to the compulsory portion without time limitation. However, the gift itself remains absolutely effective.

MwSt & Trade Tax: Commercial Real Estate Trade for Real Estate

The value added tax (MwSt) is passed on to the buyer and new owner at 19% of the purchase price in the case of commercial real estate sales.

The trade tax (GewSt) is charged to the real estate seller in the context of commercial sales transactions and is calculated individually on the basis of the capital gain. The share of profit corresponding to a tax rate of 3.5% multiplied by the municipal assessment rate results in the trade tax amount to be paid.

Trade tax amount = 3.5 % of the profit * assessment rate

Automatic Trade Tax Liability & Allowances – Partnerships, Natural Persons & Co

Insofar as the properties are business assets, the associated income from profits is generally subject to tax. If the 10-year period stipulated in the German Income Tax Act (EStG) with regard to speculation tax is not met, or the three-object limit is exceeded in the sale of real estate units, the corresponding income is also automatically subject to trade tax.

A property originally purchased as an apartment building, which is subdivided into several apartments in the course of a better letting, and resold within five years, therefore causes the same automatically generated tax liability.
Partnerships and natural persons are legally granted an allowance of 24,500 €. Other companies and associations can benefit from a lower tax-free allowance of 5,000 € under certain conditions.

Taxes when Buying / Renting Real Estate

Real Estate – What will you be confronted with when buying a house, a condo, a multi-family house or just land in Germany? It’s an attractive market for many, especially abroad for its strong economy and stable government.

If you’re still looking for areas to invest, or which to avoid, we have guides online.

• What are the most Expensive Cities in Germany?

The Fundamentals: Additional Costs when Buying Real Estate

Low interest rates, great loan offers and irresistible purchase prices entice one or the other to invest in German real estate, or move to the country. So, how do you start to deal enough with the the additional costs that buyers and sellers expect when signing a purchase contract. Which additional costs arise when buying a condominium? How much percent when buying a house?

With the conclusion of a purchase agreement, the financing is already finished. However, the ancillary purchase costs are often underestimated. The bills from the broker, notary, land registry and tax office will come as soon as the loan is fixed. Because of this, the credit is often underestimated. Especially coming from abroad, these costs can be difficult to understand.

• Ancillary Costs of Real Estate Purchase

Grunderwerbsteuer: Real Estate Transfer Tax

In Germany, there is also a real estate transfer tax, just as in many other countries. This is called the “Grunderwerbsteuer”. It needs to be paid everytime a property or part of a property is purchased.

The Grunderwerbsteuer is a state tax. It is determined individually by each federal state (called Bundesland or Bundesländer). At present, it falls between 3.5% and 6.0%, depending on the location. The tax is levied on the basis of the Grunderwerbsteuergesetzes (GrEStG). The respective federal states therefore also decide how to apply it, and to what degree they pass it to lower levels of government.

• Grunderwerbsteuer: German Real Estate Transfer Tax Explained

Appraising Property: Reduce Service Charges + Investment Capital

The better the valuation of the property, the lower the service charges and transfer tax. Therefore, it is vital to get engaged with the valuation of real estate. This process is similar in Germany as in other countries, but the details make up the whole. In general, the difficulty in the appraisal process is the reason why many people hire real estate agents. If you accept a purchase price immediately, you will probably pay on top of it. This is not hard to accept, but if the purchase price is a 5-digit number, it quickly adds up.

These savings would be much better served paying for a renovation or modernization, for example with a new heating system, which you could have done in the repair or modernization. This would have two positive side effects:

1. Reduction in purchase price through concrete points of criticism (e.g. building materials)
2. Increase in value through renovation for resale

So not only do you pay less, you can also use the available assets to increase the value of your property. The more detailed you check the property, the more likely you are to minimize the purchase price. You can learn what is important when evaluating real estate in Germany here:

• Appraising property

If you already have a specific property in mind, I recommend the individual articles on land, apartment, house and Co.

• Appraising Apartment
• Appraising House
• Appraising Apartment Buildings
• Appraising Land

Taxes on Rental Income: GmbH or ‘Stiftung’

Taxes on rental income are definitely an issue for landlords. Private property ownership, ‘Immobilien GmbH’ (real estate company) or ‘Familienstiftung’ (Family Foundation)?

In order to tax your rental income as efficiently as possible – to begin with – the German state opens the possibility of founding a GmbH. A GmbH is a company, and with loopholes, you can found such a company to take care of income you make from renting out property. Yet, it may be even more profitable to found a Familienstiftung. How, when and why? Learn everything in the articles below.

Immobilien GmbH: Wealth Distribution Company

In this article you will learn the basics about the topic Immobilien GmbH. What is it? Is it the same as Vermögensverwaltende GmbH or Immobiliengesellschaft? When buying a house or a condominium, who comes up with the idea of founding a GmbH? Admittedly, it doesn’t make sense for self-interest, but it does if you’re looking to rent your property out.

By law, an immobilien GmbH is a company that pursues the purpose of letting, development, financing, realization or marketing. It is independent whether it concerns one or more properties. It also includes real estate management, for its own properties and those of third parties.

• Immobilien GmbH Explained

You may hear from some people:

Immobilien GmbH, Familienstiftung, isn’t that the same?

It’s true that there is little difference in legal forms between the two, looking at the purchase and taxation of your rental income. It does become interesting when selling real estate though. In the GmbH, the capital gain must be fully taxed. Now we look at the Familienstiftung though, where the sale is tax-free after a speculation period has expired.

Familienstiftung: Providing for retirement, Children and Almost Tax-Free

I repeat: Capital gain is fully taxed in an Immobilien GmbH. The real estate sale of a Familienstiftung is tax-free (after speculation period).

A Familienstiftung is in its essence a foundation intended to reach a goal. This can be a wealthy business mogul designating much of his funds to care for following generations, or a property investor intending to place the profits he made from renting out property in a foundation. In the following tax article we take a deep look into the subject of foundations, family foundations, real estate purchase, taxes and tax optimization. Setting up a foundation, especially a family foundation, has many advantages for you. From tax-free capital gains after speculation tax, to low (15 percent) taxation of rental income. How this works, how you can set up a foundation and how your grandchildren will profit from it, you will learn in this article.

• Familienstiftung: German Tax Optimization for Leasing

Buying Real Estate in USA

What taxes do you have to pay when you buy a house, land or condo in the USA? If you’ve changed your mind, or want to rather look in the US, what their laws are, and how taxes function there, we have an extensive article for you.

The United States of America attracts real estate investors like no other country in the world. Especially California and especially Los Angeles, but also New York City are in focus. In addition, tens of thousands are looking for apartments, condominiums and houses because their career is moving to the USA. Silicon Valley, Wall Street, and more. Here, economic, political and cultural ideas are forged. Investing in the USA can therefore only make sense if the parameters are right.

For real estate buyers, however, the big question is how the tax system in the USA works. Together with our US real estate agent, we have written extensive articles on the subject of taxes in the USA. The first part can be found here:

• Buying Real Estate: All Taxes to Know

View of San Francisco, with typical American skyline:

Real Estate Tax Deductions: US Tax System

Mortgage Credit? Property Taxes? Here we explain all the important terms that you will come across in the US real estate tax system. Here you will find simple instructions on how to reduce the purchase price you pay for your real estate or property in the USA: From tax credits to deductions and allowances. This tax guide gives you a quick and easy overview of what goes into your tax calculation and how you can legally reduce the taxes you pay.

• Tax Deductions USA

Taxes on the Sale of Real Estate

Coming soon!