The Real Estate Market in Germany

german english

as at August 2010
With respect to purchase and sale and concerning tenancy agreements, the real estate market in Germany is subject to forms of acquisition as follows:

Forms of acquisition

1. Notarial form necessary for acquisition Yes, obligatory (§311 b S. 1 BGB)
2. Entry in the Land Register: yes or no Yes
a) priority notice of conveyance (security)
b) conveyance of land (passing of title)
3. Currency transfer subject to approval No
4. Right of pre-emption Yes, local authorities
5. Composition of the Land Register Title page:
local subdistrict, volume, folio

Register of items of landed property:
size, site,description

Section I:
register of legal owners

Section II:
easements, heritable building lease, right of way,right of usufruct, right of residence

Section III:
mortgages, land charges,annuity land charges
6. Debit entry in the Land Register possible Yes, in section II and III.

 

Costs of Acquisition
7. Amount of the notarial fees in % of the purchase price 0.3 - 0.5 % + VAT (different German states' rules)
8. Amount of the land registry costs 0.5 - 0.8 % of the purchase price
9. Amount of the brokerage (broker's commission) for buyer 2 - 5 % of the purchase price + VAT (different German states' rules)
10. Amount of the brokerage for seller 0 - 3 % of the purchase price + VAT (different German states' rules)
11. Amount of the costs for Up to about mortgage registration 0.5 % of the mortgage amount

 

Taxes
12. Real property acquisitions tax 3.5 % of the purchase price
13. Value added tax or turnover tax None, on real property turnovers
14. Housing tax None
15. Double taxation agreement With several countries
16. Payment of tax on owner-used rental value Yes, fictitious or actual rent for two-family-houses
17. Payment of tax on rental income Yes
18. Sales profit tax-exempt when resold Yes, after the expiration of the speculation deadline of 10 years, if the real estate is private property
19. Amount of the real-estate tax After formula and basic assessment figure
20. Amount of the inheritance tax and gift tax 7 - 50 % in three taxation classes
21. Financing Yes
22. Deduction of the interest on debts Yes, in case of income from immovable property

 

Letting / Leasing
23. Apartments and houses Tenancy agreement recommendable, otherwise settlement accordingto German Civil Code is effective. Fixed-term tenancy agreementand tenancy agreement with progressive increases possible.Brokerage two monthly net rents at the most plus VAT.
24. Business Tenancy agreement recommendable. Brokerage by private agreement, customary in the locality3 % of the total rent plus VAT, a maximum of 10 annualrents as a rule, or 2-3 monthly rents plus VAT.