Real Estate in Germany for Foreign Buyers — Legal and Tax Guide 2026

Who Can Buy German Real Estate

Germany imposes no nationality, residency, or visa restriction on property purchase. Any natural person or legal entity worldwide may acquire German real estate on the same terms as a German national. The legal basis for property transfer is a notarially certified Auflassungsvertrag under BGB §311b, executed before a German Notar. The Notar is a neutral public official — both buyer and seller are represented by the same Notar; no separate conveyancing solicitor is required. Transfer of legal ownership occurs not on contract signing or payment but on entry of the new owner in the Grundbuch (land registry), typically 6–12 weeks after notarisation.

• No nationality or residency restriction — BGB §311b, GrEStG §1
• Mandatory notarisation: all real estate sales require a German Notar under BGB §311b
• Notary fee: approximately 1.0–1.5% of purchase price under GNotKG — non-negotiable
• Ownership only transfers on Grundbuch entry — not on payment or contract signing
• Auflassungsvormerkung (priority notice) protects buyer during the 6–12 week registration gap

Grunderwerbsteuer (RETT) — Rates by All 16 Bundesländer

Grunderwerbsteuer (GrEStG §1) is a one-time real-estate transfer tax levied on acquisition. Each Bundesland sets its own rate under GrEStG §11, ranging from 3.5% (Bayern, unchanged since 1997) to 6.5% (Brandenburg, NRW, Saarland, Schleswig-Holstein, Thüringen). The tax is assessed on the notarised purchase price. It must be paid before the Finanzamt issues the Unbedenklichkeitsbescheinigung (tax clearance certificate), without which the Grundbuchamt will not register the transfer. Commercial practice invariably allocates RETT to the buyer.

Notary and Grundbuch Fees — GNotKG Schedule

Notary fees and court registration fees are set by the Gerichts- und Notarkostengesetz (GNotKG) and are non-negotiable. Total notary and Grundbuch fees typically run approximately 1.5–2.0% of the purchase price for transactions in the €200,000–€1M range. The notary fee covers drafting and certifying the Kaufvertrag, the Auflassung, and (if applicable) the mortgage deed. The Grundbuchamt charges a separate court fee for the ownership entry. Mortgage (Grundschuld) registration adds approximately 0.2–0.3% of the loan amount. Both fees are due even if the transaction subsequently falls through.

• Total notary + Grundbuch fees: ~1.5–2.0% of purchase price for €200K–€1M transactions
• Fee scale: GNotKG Anlage 1 (Kostenverzeichnis) — no negotiation permitted
• Grundbuch ownership entry fee: ~0.4–0.5% of purchase price (Tabelle A GNotKG)
• Grundschuld registration: additional ~0.2–0.3% of the loan amount if financing
• Foreign buyer with no German: sworn interpreter required at notarial appointment — budget €400–€1,500

Real Estate Agent Commission — Maklergebühr

The December 2020 reform (Gesetz über die Verteilung der Maklerkosten) limits the buyer's agent commission for residential property (Wohnimmobilien) to a maximum of 3.57% of the purchase price including 19% VAT, and prohibits the seller from passing more than half the total commission to the buyer. Total agent commission is therefore capped at 7.14% incl. VAT (3.57% each). For commercial real estate (Gewerbeimmobilien), the reform does not apply and fees are freely negotiable, typically 3.0–5.0% + VAT for the buyer. Agent commission is payable only on successful completion and must be agreed in a written Maklervertrag.

Full Transaction Cost Breakdown

Total acquisition costs for German real estate typically run 8–12% above the purchase price, depending on Bundesland and whether an agent is involved. These costs are non-negotiable and non-refundable once incurred.

The Grundbuch — Germany's Land Registry

The Grundbuch is the definitive legal record of real property ownership and encumbrances in Germany, maintained by the Grundbuchamt (land registry department of each local Amtsgericht). A buyer who relies on the Grundbuch in good faith (gutgläubiger Erwerb) is protected even if the entry is incorrect under BGB §892. Each property has its own Grundbuchblatt divided into sections covering: the property description (Bestandsverzeichnis), current owner (Abteilung I), encumbrances and the Auflassungsvormerkung (Abteilung II), and mortgages and land charges (Abteilung III).

Spekulationssteuer — Capital Gains Tax on Private Property Sales

Gains from the private sale of German real estate are subject to income tax under EStG §23 if the property is sold within 10 years of acquisition. After 10 years, gains are completely tax-free for private individuals — the Spekulationsfrist exemption. A second exemption applies if the property was used exclusively as the owner's principal residence (Eigennutzung) for at least the 2 full calendar years immediately before the sale. Taxable gains are added to the seller's total income and taxed at their personal rate (up to 45% + 5.5% Soli). Corporate owners (GmbH, AG) are never eligible for the Spekulationsfrist exemption — all disposal gains are taxable.

• 10-year holding rule: sales within 10 years of purchase trigger income tax on gains (EStG §23)
• After 10 years: gains completely tax-free for private individual sellers
• Eigennutzung exception: gains tax-free if used as primary residence in the 2 full calendar years before sale
• Tax rate on gains: personal income tax rate up to 45% + 5.5% Solidaritätszuschlag
• Corporate owners (GmbH/AG): no 10-year exemption — all disposal gains taxable under KStG

Hausgeld and the WEG — Apartment Ownership

Purchasing an apartment (Eigentumswohnung) automatically makes the buyer a member of the Wohnungseigentümergemeinschaft (WEG) under the Wohnungseigentumsgesetz. Membership is mandatory and non-transferable. Monthly Hausgeld covers shared building costs: insurance, the mandatory Instandhaltungsrücklage (maintenance reserve under WEG §19(2)(4)), communal area upkeep, lift servicing, and management fees. The 2020 WEMoG reform strengthened individual owner rights, including the right to demand EV charging installation (WEG §20(1)) and broadband cabling. Always check the Beschlusssammlung and last 3 years of Jahresabrechnung before buying.

• WEG membership automatic on purchase of apartment — cannot be waived
• Hausgeld: monthly contribution — budget €2–4/sqm/month in older buildings (higher in new builds)
• Instandhaltungsrücklage: mandatory maintenance reserve under WEG §19(2)(4) — verify adequacy before purchase
• WEMoG 2020: right to demand EV charger (WEG §20(1)) and broadband infrastructure installation
• Pre-purchase due diligence: review Beschlusssammlung, last 3 Jahresabrechnungen, and pending special assessments

Mietpreisbremse — Rent Control in Tight Markets

Germany's Mietpreisbremse restricts initial rent in designated tight housing market (angespannter Wohnungsmarkt) areas to a maximum of 10% above the ortsübliche Vergleichsmiete (local reference rent set in the Mietspiegel). Introduced under the Mietrechtsnovellierungsgesetz in 2015, it is currently active in approximately 550 municipalities including Berlin, Munich, Hamburg, Frankfurt, Stuttgart, and Cologne. Exceptions apply: new buildings first rented after 1 October 2014 are exempt; units comprehensively modernised at a cost of at least one-third of new construction cost are also exempt. Landlords charging above the cap must repay excess rent if the tenant formally complains within 30 months under MietNovG §4.

Share Deal vs. Asset Deal — 2021 RETT Anti-Avoidance Reform

In a share deal, the buyer acquires shares in an entity that owns the property rather than the property directly, historically allowing Grunderwerbsteuer avoidance below a statutory threshold. The GrEStG §§1(2a) and 1(2b) were tightened in July 2021: acquiring 90% or more of a property-owning entity within 10 years now triggers full RETT. The previous threshold was 95% over 5 years. A new §1(2b) provision now expressly covers corporate (as well as partnership) entities. Both direct and indirect (chain) acquisitions are caught. Any co-investor structure must be carefully designed to ensure the 90% threshold is not exceeded within the 10-year window.

• Pre-2021: 95% threshold over 5 years triggered RETT on share deals
• 2021 reform: threshold lowered to 90%; holding period extended to 10 years (GrEStG §§1(2a), 1(2b))
• §1(2b): new provision covering acquisitions of corporate entities (previously only partnerships under §1(2a))
• Direct and indirect (chain) acquisitions are both caught — look-through applies
• Seek specialist GrEStG advice before structuring any property share deal above €500K