The purchase of German property through our proven legal system is straight forward and easy. First you should know that the German law requires the actual purchase contract be signed in front of a notary public. In this procedure the notary public reads the contract to all parties participating in German language. That means if you don’t understand the German language you will need either a proxy (solicitor) or a personal sworn interpreter ( if choose to sign yourself ). Our legal system is set up specifically to help foreigners purchase German property on an easy and cost efficient way without forgetting about the important requirements regarding German law and the security requirements for all parties. To purchase a property with us you will have to sign the “Handling Mandate and Power of Attorney”

What does this document do ?
The “Handling Mandate” ( first part of the document ) is the first step of the purchase. The clauses in the “Handling Mandate” are giving order to the notary
public to open an escrow account held by himself for the secure purchase and to prepare the contract on behalf of both parties.
Further more you order us to receive your bills and pay all purchase costs on your behalf by opening and holding a second escrow account on your behalf.
The second part of the documents is the important power of attorney to the solicitor who acts on your behalf. We have made arrangements with the solicitor
that he signs the contract on a fix price basis on your behalf (265,00 €) and not depend on the purchase price. If you wish to have an extended service from the solicitor it is up to you make your own arrangement with him. The notary public will forward the details of the escrow account to you and us.
Now it is time for you to transfer the agreed purchase price to the notary public and to transfer 10 % of the purchase price ( minimum 2000,00 € ) to the escrow account held with us to pay your purchase costs. In case you have paid already a deposit to us or the vendor directly we will fill your escrow account held with us with the amount from the deposit. Please understand that you will have to send always 100 % of the purchase price to notary public. Any exceptions must be confirmed by us in writing and are part of the “special conditions” of the sale.

Important notice:
Please arrange all money transfers as an O.U.R. transfer. That means that all transaction costs are being charged against your account not against the amount you have sent. Please understand that the notary can not start with any work if there is one cent missing. After the notary public has confirmed to us that the full purchase price has arrived at the escrow account, we will appoint the notary public together with the solicitor chosen for this transaction to act
on your behalf and sign the purchase contract. When this has been done, the notary public will start all necessary register steps. During the conveyancing process certain permissions and bills need to be paid. In the following section we will give you a small overview about the kind of the bills as well as how much they cost. We try to give you a complete overview with our best knowledge but we can not guarantee that in some cases some extra costs are applicable.

General costs ( always applicable)

1) Notary public fee
The amount is different and depends on the purchase price. In general it is approx. 1.5 % of the purchase price. If the purchase is very low it can even be up to 10 % or more and if the purchase price is very high it will be less then 1.5 %.
Some examples:
Purchase price Notar fee
10000.00 € Approx. 250.00 €
30000.00 € Approx. 550.00 €
50000.00 € Approx. 750.00 €

2) Solicitor fee
Fix price for signing the contract on your behalf. 265.00 €.
Extra services ordered by you needs to be negotiated and paid by you directly

3) Stamp duty
The stamp duty for all German properties except properties situated in Berlin city is 3.5% of the
purchase price. In Berlin city 4.5 %.

4) Negative certificate
The negative certificate confirms that the local council resigns of their right to step in the contract
and take the property for their own communal interests.
The costs are different and depend on the local council law. We have had amounts between 5.12 €
and 50.00 € in the past.

5) Register fees to court
During the purchase procedure you will have to pay two bills to the register court.
The first bill is for your priority notice and the second bill is for the final entry and your full title
deeds.
The costs are between 30.00 and 200.00 € per bill. The general rule as higher the purchase price as
higher the costs is applicable for these costs.

6) Estate agents handling fee
Unfortunately nobody is able to offer any service for free so we need to charge 300.00 €
to provide the full service as mentioned above

7) Bank account costs
The Bank charges 7.61 € / month against the escrow account

Special costs (sometimes applicable)

1) Properties that are listed ( monumental protection )
All purchases of listed buildings require an additional permission from the local building Council. The costs for this permssion are up to approx. 100.00 €

2) Properties in a “refurbishment area”
All properties situated in a refurbishment area need permission from the building council. The costs for this permition are up to approx. 100.00 €

3) Properties in Brandenburg
All properties and land in Brandenburg need the permssion from the environment council. The costs are approx. 30.00 – 80.00 €

4) Properties in Saxony
All properties and land in Saxony need the permssion according the Saxony water law. The costs are approx. 30.00 – 100.00 €

5) Properties that not have been sold since the German unification
If a property is being sold first time after the German unification the transaction needs to be confirmed with a certificate called GVO. It proofs that this property has not been taken over illigally in the times of Adolf Hitler or the GDR.The costs are eaven up to 150.00 € depending on the council and area.
When does the vendor receives the purchase price from the notary public ? The vendor will receive the purchase price when the negative certificate is stated and paid and your priority notice has been successfully entered into the land registry. In some cases some of the other certificates mentioned above are also necessary.

Completion
Due to the fact that whole purchase procedure may take a few month in Germany as many councils are involved, we understand completion as the moment when both parties has fullfilled their personel oblidgements.

That means for the buyer:
1) to sign the handling mandate and power of attorney

2) to pay the purchase price and costs as mentioned above

3) to have his signature witnessed by a German notary public or consulate/ambassy (can be done on a later stage)

and for the vendor:
1) to hand over the property on the first of the month after the full purchase price has been paid to the notary public

The purchase contract enables you to take over the property and collect the rent ( if tenanted ), or to use the property your self. Latest at this stage you will have to choose someone who will represent you in Germany during your ownership. You will need someone to look after your property during your apsence or to collect rents and make service charge balances with your tenants. We will need to know to who to sent tenancy contracts and balances. Please let us know.
Due to the various certificates needed during the purchase procedure we advise you carefully not to do any costintensive refurbishment on properties where the purchase is not secure. The notary public will advise you when this stage has been reached. In generell is to say that as long as the notary public holds the purchase price on the escrow account the puchase could fail. We want to point out that this has never happened for us in past ! In this case the notary public will inform you and send you your money back so do we with the purchase costs held on your behalf.

Finalizing your purchase
The German law requires you to come once to Germany or to one of the consulates/ambassies to witness your sigantur. Remember just when this is fullfilled you will get your final entry in the land registry and your full title deeds.

Balances
After the successful purchase procedure we will balance the amount held on our escrow account with you.

FAQ

1) How long does it take until the property is registered in my name ?
Due to the fact that so many permitions are needed the normal time is three to six month. This depends on all local governments involved. You will take possession earlier !

2) Who can buy in Germany ?
Germany has no further important restrictions to who it is allowed to purchase a property.

3) Which costs are involved to own a vacant property in Germany ?
1) land tax for residential approx. 0.40 to 0.80 Euro per sqm internal space
2) or commercial approx. 0.70 – 1.00 Euro per sqm internal space
3) liability insurance approx. 60 – 200 Euro p.a.
4) fire insurance if required depending on value and area approx. up to 300.00 Euro
5) winter service and street cleaning approx. 500.00 Euro depending on plot size (width plot size
facing the street)
6) rain water (surface water run off into sewage system) for houses in cities
7) management trough us approx. 59,00 Euro +VAT per month

4) Which costs are involved to own a property that is let ?
A fully rented property does not cause you any running costs except of management if required and income tax as well as an accountant if you choose. Other landlord costs are repairs. Repairs that add value and quality of living can give you a chance to increase the rent.

5) What is the tax rate in Germany ?
Please understand that we can not give you any kind of tax advise as we are not permitted to do that. In general foreigners have to pay approx. 26.3 % tax on their income in Germany. For other matters please contact an accountant. If need one, please contact us separately.

Legal notice:
Please understand that this purchase guide does not form a contract and if a contract is being closed, this guide never will be part of the contract.
We do not take any responsibility for this content as far as the applicable law can change. Do do not give legal advices with this guide. Its up to get Legal advice from a qualified solicitor.

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