Authored by the expert who managed and guided the team behind the Germany Property Pack
Everything you need to know before buying real estate is included in our Germany Property Pack
Foreigners can buy property in Germany without any nationality-based restrictions, enjoying the same ownership rights as German citizens.
Whether you're from the EU or outside it, Germany's property market is open to international buyers with no special requirements or additional hurdles. The process is transparent, though legally formal, requiring a notary for all transactions.
If you want to go deeper, you can check our pack of documents related to the real estate market in Germany, based on reliable facts and data, not opinions or rumors.
Foreigners face no legal restrictions when buying property in Germany and can purchase for personal use or investment without residency requirements.
Expect to pay 8-15% in additional costs beyond the purchase price, with property prices varying significantly from €2,000/m² in eastern cities to €12,000/m² in Munich.
| Aspect | Details | Key Considerations |
|---|---|---|
| Legal Restrictions | None based on nationality | Same rights as German citizens |
| Residency Requirement | Not required for purchase | Property ownership doesn't grant residency |
| Notary Requirement | Mandatory for all transactions | Ensures legal compliance and registration |
| Mortgage Access | Available to foreigners | 20-40% down payment typically required |
| Additional Costs | 8-15% of purchase price | Includes taxes, notary, and agent fees |
| Best Cities for Investment | Leipzig, Dresden, Berlin suburbs | High rental yields and appreciation potential |
| Tax Implications | Rental income taxable | Capital gains tax if sold within 10 years |
Can foreigners legally buy property in Germany without restrictions?
Yes, foreigners can legally buy property in Germany with absolutely no restrictions based on nationality.
Whether you're from the EU, US, Asia, or anywhere else, you have the same property ownership rights as German citizens. There are no special permits, no additional requirements, and no legal barriers preventing foreign nationals from purchasing residential real estate in Germany.
Unlike some European countries that restrict foreign ownership or require special permits, Germany maintains an open property market. You don't need to be a resident, hold a specific visa, or have any particular residency status to buy property.
However, it's crucial to understand that owning property in Germany does not grant you any residency rights. If you plan to live in Germany for more than 90 days, you'll need to apply for the appropriate visa or residency permit through standard immigration channels.
The German government treats property ownership and residency as completely separate matters, so purchasing real estate won't help with immigration status.
Do I need to live in Germany or have a specific visa to buy property?
You do not need to live in Germany or hold any visa to purchase property in the country.
Foreign buyers can purchase German real estate while living abroad, without ever setting foot in Germany during the purchase process. There's no difference in requirements whether you plan to live in the property yourself or rent it out as an investment.
Non-residents face the same purchase process as residents, though practical matters like opening a German bank account or securing financing might be slightly more complex. You're free to buy property purely as an investment and rent it out immediately, or keep it vacant for occasional visits.
It's something we develop in our Germany property pack.
The only consideration is that if you do plan to spend significant time in your German property (more than 90 days per year), you'll need to arrange appropriate visa or residency status separately from your property purchase.
What's the complete step-by-step process for foreigners buying property in Germany?
The property buying process in Germany follows a structured, legally-protected pathway that ensures security for all parties involved.
First, research the German property market thoroughly, identifying your preferred city, property type, and budget. Engage a real estate agent (Makler) who can help navigate local markets and find suitable properties.
Once you've found a property, conduct comprehensive due diligence by verifying ownership through the land registry (Grundbuch), checking for any debts or liens, and getting a professional property valuation. This step is crucial as German property law heavily protects buyers who perform proper checks.
| Step | Action Required | Documents Needed |
|---|---|---|
| 1. Property Search | Work with real estate agent | Proof of funds, ID |
| 2. Financing | Apply for mortgage if needed | Income proof, bank statements |
| 3. Due Diligence | Check Grundbuch, get valuation | Land registry extract |
| 4. Contract Drafting | Notary prepares Kaufvertrag | Passport, tax number |
| 5. Notarization | Sign contract with notary | Signed purchase agreement |
| 6. Payment | Transfer purchase price | Bank transfer proof |
| 7. Registration | Notary registers ownership | All previous documents |
After due diligence, the notary drafts the purchase contract (Kaufvertrag) which both parties must sign in the notary's presence. Following notarization, you transfer the purchase price according to contract terms, and the notary registers you as the new owner in the land registry.
Can I complete the purchase remotely without traveling to Germany?
Yes, you can complete the entire property purchase process without being physically present in Germany.
The German legal system allows buyers to grant a notarized power of attorney to a trusted representative, lawyer, or specialized service provider who can act on your behalf throughout the transaction. This power of attorney must be properly notarized in your home country, receive an apostille certification, and be translated into German by a certified translator.
Your appointed representative can view properties, negotiate terms, sign the purchase contract at the notary, and handle all administrative tasks. Many international buyers successfully purchase German property this way, particularly investors from Asia, the Americas, and other distant regions.
Modern technology also facilitates remote transactions, with virtual property viewings becoming increasingly common and digital document signing accepted for preliminary agreements. Only the final notarization requires physical presence, which your attorney-in-fact can handle.
As of June 2025, some progressive notaries are even exploring digital notarization options for international buyers, though this isn't yet universally available.
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Is hiring a notary mandatory, and what about lawyers?
Hiring a notary is absolutely mandatory for all property transactions in Germany - the purchase contract is legally void without notarization.
The notary plays a central role in German property transactions, acting as an impartial legal officer who ensures both parties understand the contract, verifies all legal requirements are met, and protects both buyer and seller. They draft the purchase contract, read it aloud to both parties, answer questions, and ensure no party is under duress.
Notaries also handle crucial administrative tasks including checking the land registry for encumbrances, securing priority notices to protect the buyer, managing the escrow process for payments, and registering the new ownership after completion. Their fees are regulated by law and typically amount to 1-1.5% of the purchase price.
While lawyers aren't mandatory, foreign buyers should strongly consider hiring one, especially if they don't speak German fluently or aren't familiar with German property law. A lawyer can review contracts before notarization, negotiate terms, and protect your specific interests as a foreign buyer.
The notary, while ensuring legal compliance, represents neither party and won't advocate for your interests.
Can foreigners get mortgages in Germany, and what are the current rates?
Foreigners can definitely obtain mortgages from German banks, though requirements vary based on your residency status and nationality.
EU citizens often receive similar mortgage terms to German nationals, sometimes financing up to 100% of the property value with proper income documentation. Non-EU citizens typically face stricter requirements, including larger down payments of 20-40%, proof of stable income (preferably in euros), and a strong credit history.
As we reach mid-2025, typical mortgage interest rates in Germany range from 3.5% to 4.5% per annum for fixed-rate mortgages, significantly higher than the historic lows of 2020-2021. Standard loan terms extend to 20-30 years, with loan-to-value ratios of 60-80% for non-residents.
To improve your mortgage approval chances, prepare a substantial down payment (minimum 20%), obtain pre-approval before property hunting, demonstrate stable income for at least two years, maintain a credit score above 700, and minimize existing debts. Some banks also favor applicants with German bank accounts or employment contracts with German companies.
It's worth noting that German banks are generally conservative lenders, prioritizing long-term stability over short-term gains.
What taxes, fees, and hidden costs should I expect?
Expect to pay 8-15% of the property purchase price in additional costs, which many first-time buyers in Germany underestimate.
Property transfer tax (Grunderwerbsteuer) varies significantly by state, ranging from 3.5% in Bavaria to 6.5% in North Rhine-Westphalia, Brandenburg, and Schleswig-Holstein. This tax is unavoidable and must be paid shortly after signing the purchase contract.
Notary and land registry fees are standardized across Germany at approximately 1.5-2% of the purchase price. Real estate agent commissions typically range from 3.57% to 7.14% (including VAT), often split between buyer and seller, though in hot markets buyers may pay the full commission.
| Cost Type | Percentage Range | When Payable |
|---|---|---|
| Property Transfer Tax | 3.5% - 6.5% | After contract signing |
| Notary & Registry Fees | 1.5% - 2% | At completion |
| Real Estate Agent | 3.57% - 7.14% | At completion |
| Mortgage Arrangement | 0.5% - 1% | When financing |
| Property Valuation | €500 - €1,500 | Before purchase |
| Translation Services | €500 - €2,000 | Throughout process |
| Legal Fees (optional) | €2,000 - €5,000 | Throughout process |
Additional ongoing costs include annual property tax (Grundsteuer), which varies by municipality but typically ranges from 0.3% to 1% of the property value annually. When selling, be aware of capital gains tax, which applies if you sell within 10 years of purchase unless you lived in the property yourself for at least two consecutive years.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Germany versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Which German cities offer the best lifestyle and expat communities for foreigners?
Germany offers diverse cities catering to different lifestyles, with Berlin, Munich, and Frankfurt leading as top destinations for international residents.
Berlin attracts creatives and tech professionals with its vibrant cultural scene, relatively affordable housing (compared to other major European capitals), and massive international community. The city offers excellent public transport, diverse neighborhoods from trendy Prenzlauer Berg to multicultural Neukölln, and a thriving startup ecosystem.
Munich provides the highest quality of life in Germany, combining Bavarian tradition with international business culture. Despite being Germany's most expensive city, it offers proximity to the Alps, excellent job opportunities in tech and automotive sectors, pristine public spaces, and one of Germany's largest expat communities, particularly appealing to families.
Frankfurt, Germany's financial capital, hosts a highly international population due to its banking sector and European Central Bank headquarters. The city offers excellent international schools, direct flights worldwide, and a compact city center, though it lacks the cultural vibrancy of Berlin or Munich.
For more affordable options with growing expat scenes, consider Leipzig (vibrant arts scene, student population), Hamburg (maritime culture, media industry), Düsseldorf (Japanese community, fashion industry), or Cologne (friendly locals, cultural events).
Where should I invest for the best rental yields and appreciation potential?
Leipzig and Dresden currently offer Germany's most attractive investment opportunities, combining high rental yields with strong appreciation potential.
Leipzig, once overlooked, now delivers rental yields of 4-5% annually while property prices have increased 60% over the past five years. The city benefits from major corporate relocations (Porsche, Amazon), a growing student population of 40,000+, and extensive urban regeneration projects. With average prices still around €2,500-4,000 per square meter, it remains accessible to international investors.
Dresden offers similar yields of 3.5-4.5% with steady appreciation, driven by its tech sector growth (Silicon Saxony), tourist appeal with 2.5 million annual visitors, and ongoing infrastructure investments. The city's baroque architecture and cultural offerings attract both long-term tenants and short-term rental demand.
It's something we develop in our Germany property pack.
Berlin suburbs like Potsdam and Oranienburg present opportunities as buyers seek affordability outside the capital. These areas benefit from Berlin's economic spillover while offering 20-30% lower prices. University cities like Münster, Heidelberg, and Freiburg provide stable rental demand from students and academic staff, though yields are moderate at 2.5-3.5%.
How do property prices vary across Germany's major cities?
Property prices in Germany vary dramatically, with Munich commanding premium prices while eastern cities offer significant value.
Munich leads with average prices of €8,000-12,000 per square meter in June 2025, driven by limited supply, strict building regulations, and strong economic fundamentals. Prime locations like Schwabing or Maxvorstadt can exceed €15,000/m². Frankfurt follows at €6,000-9,000/m², with financial district properties commanding premiums.
Hamburg and Stuttgart cluster around €6,000-8,500/m², reflecting their strong regional economies and limited housing supply. Berlin's prices have moderated to €5,000-7,500/m² following years of rapid growth, with significant variations between trendy Mitte (€8,000+) and outer districts like Marzahn (€3,500).
Mid-tier cities offer better value: Düsseldorf and Cologne range from €4,500-6,500/m², while Nuremberg and Hannover sit at €4,000-5,500/m². The real opportunities lie in eastern Germany, where Leipzig (€2,500-4,000/m²), Dresden (€3,000-4,500/m²), and smaller cities like Halle or Magdeburg (€2,000-3,500/m²) provide entry points for investors.
These price differentials reflect economic disparities but also opportunities, as eastern cities continue catching up with western counterparts in terms of infrastructure and employment.
What mistakes do foreigners commonly make when buying German property?
The most costly mistake foreigners make is underestimating total purchase costs, budgeting only for the property price without the additional 8-15% in taxes and fees.
- Skipping proper due diligence - Not checking the Grundbuch (land registry) for debts, easements, or usage restrictions that could affect property value or your plans
- Language barriers - Signing contracts without proper translation or legal representation, missing crucial terms that could cost thousands
- Assuming property grants residency - Many buyers mistakenly believe owning property provides visa benefits or residency rights in Germany
- Ignoring local regulations - Particularly in cities like Berlin with strict rent controls (Mietendeckel) or regulations against vacation rentals
- Expecting tax benefits - Unlike the US or UK, Germany offers no mortgage interest deduction for owner-occupied properties
- Leaving properties vacant - Some municipalities prohibit or penalize empty properties, requiring owners to rent them out
- Poor financing preparation - Approaching German banks without proper documentation or expecting similar terms to their home country
- Overlooking property management needs - Especially for non-resident owners who underestimate the complexity of managing German rental properties remotely
- Not understanding co-ownership rules - In apartment buildings, ignoring Hausgeld (maintenance fees) obligations and co-owner association regulations
Avoid these pitfalls by engaging qualified professionals, budgeting comprehensively, and understanding that German property law prioritizes stability and proper procedure over quick transactions.
What are the tax implications of owning German property as a non-resident?
Non-resident property owners face specific tax obligations in Germany that require careful planning and compliance.
Rental income from German property is subject to German income tax regardless of your residency status. Non-residents must file annual German tax returns reporting rental income, with tax rates starting at 14% and potentially reaching 45% for high earners. However, you can deduct legitimate expenses including mortgage interest, property management fees, maintenance costs, depreciation (typically 2% annually), and property tax.
Capital gains tax applies if you sell the property within 10 years of purchase, taxed at your personal income tax rate. The key exception: if you lived in the property yourself for at least two consecutive years, the sale is tax-free regardless of timing. After 10 years, all property sales are tax-exempt from capital gains.
Annual property tax (Grundsteuer) is unavoidable and varies by municipality, typically ranging from €200-1,000 annually for average apartments. A major reform in 2025 has led to reassessments nationwide, potentially increasing tax bills in popular cities.
Inheritance tax applies to German property regardless of heir nationality, with rates from 7-30% depending on relationship and value. Non-resident heirs should seek specialist advice as Germany has inheritance tax treaties with many countries to avoid double taxation.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Investing in German real estate as a foreigner is straightforward legally but requires careful financial planning and professional support.
With no nationality-based restrictions and a transparent legal framework, Germany welcomes international property investors. Success depends on understanding total costs, choosing the right location for your goals, and navigating the formal purchase process with proper professional guidance.
Sources
- Investropa: Germany Real Estate for Foreigners
- Finance for Expats: Legal Requirements for Property Purchase
- EasyFX: Non-Resident Property Buying Guide
- Hypofriend: The Notary Process in Germany
- Expatica: Getting a Mortgage in Germany
- PTI Returns: Property Tax Guide Germany
- Global Property Guide: Germany Price History
- Tranio: Germany Mortgage Guide
- Terratern: Cheapest Cities in Germany
- CrowdsQ: Top Investment Cities Germany