Information-purchase-let-taxes
Additional information
According to German law, real estate can be purchased by private persons, as well as by juridical representatives.
It is worth mentioning, that every real estate in Germany has to be registered in the register of real estates called "Grundbuch". This register contains complete information (e.g. current proprietor, value of the property, a detailed footprint and a possible existence of indebtedness on the part of the current owner) about the real estate you are interested in.
The property can exclusively be sold by its owner or a person, who is legally authorized by the owner. Generally the right to sell real estate is given to a lawyer. It is important to know, that an ownership of real estate does not automatically lead to a residence permit in Germany. But it might be an important point for the German administration authorities to grant this permit, as the ownership of real estate can be considered as an evidence for the owner`s material stability. Persons who own real estate in Germany have the right to get a visa for 90 days per year. Persons with business contacts can obtain a business-visa for 6 months or longer, if a special case exists.
Purchase of real estate
After a prospective customer has chosen an object he likes and made the decision to purchase it, a contract has to be drawn up, including details concerning conditions and form of payment. The contract has to be subscribed in front of an officially sworn notary, representing the interests of both sides. The notary will examine the chosen property concerning debts and other obligations. He also takes responsibility for the payment of broker`s commission and other expenditures like for example the registration in the register of real estates. After subscribing the contract by both sides and a 100% payment the acquirer becomes owner of the property. The notary sends all documents to the registry of deeds called "Grundbuchamt" and within 2 months the acquirer gets a copy of the estate`s registration in the register of real estates.
Renting property
Purchasing of real estate as capital investment
Every owner has the right to rent his property. This requires a rental agreement between the owner and the prospective tenant, which can be concluded for duration of one year or more.
The hirer has to pay a deposit of 2-3 monthly rent amount, which will protect the owner from financial losts in case of a hirer`s illiquidity.
The rental agreement has to contain the rental fee + deposit + additional charges. If the contract indicates the property`s condition as renovated, it is the hirer`s duty to leave the real estate in the same condition. If the hirer doesn’t do so, the landlord has the right to use the given deposit to pay the property`s renovation. If everything is left in a good condition, the deposit will be completely returned.
Taxes and costs when acquiring a real estate
Total expenditure:
- Price of the property - Expenditures on notary and registration – 1,5% of price
- Real estate acquisition tax – 3,5% of price
- Broker`s commission – 3,6% of price (every federal state in Germany has its own broker`s
commission percentage)