What Expats Should Know Before Buying a House in Germany

Buying a house in Germany isn’t a sprint—it’s a tidy, well-signposted jog. Prices are listed per square meter (cue different math), a notary seals every deal, and the land registry has the final say. Banks care less about charm and more about steady numbers, so pre-approval beats “we’ll figure it out” every time.

If you’re eyeing Berlin, Munich, Frankfurt, Hamburg, or Düsseldorf, the rules are the same—but the price tags and pace aren’t. Here’s what to expect, what paperwork actually matters, and how to avoid falling for a “cozy” flat that turns out to be 42 m²—including the hallway. Let’s make the process simple enough that you only need coffee, not courage.

EU, non-EU, resident, non-resident: What changes (and what doesn’t)

Germany doesn’t gatekeep by passport. EU and non-EU homebuyers can buy most property types anywhere in the German real estate market; the notary seals the deal and the land register (Grundbuch) makes it official. What does change with status is how banks, notaries, and compliance teams treat you.

What your status actually changes:

• Loan access and down payment: Residents on local payroll usually get more lenders and lower down payments; non-residents face tighter underwriting and smaller loan-to-value.
• Proof of income: Expect payslips or tax returns; foreign docs may need translations/apostilles. Stable income beats the color of your passport every time.
• Banking and address: Many lenders want a Euro (IBAN) account and a serviceable mailing address in Germany for statements and KYC.
• Paper trail speed: Non-resident homebuyers often hit extra AML checks, which can stretch timelines between purchase price agreement and notary appointment.
• Insurance and extras: Some banks require life/property cover in place before funding; they’ll check the policy details along with the loan file.

Once you know where you stand, sanity-check property prices (per m²) and hunt on ImmobilienScout24 and Immowelt with a local real estate agent who can reality-test comps.

How the process works (and the legal requirements)

Think of a German home purchase as choreography: the notary sets the tempo, the contract cues the moves, and the land registry (Grundbuch) brings down the curtain. Nothing is legally yours until that registry entry posts—so the art here isn’t speed, it’s sequencing. Here’s the order that keeps you elegant and error-free.

The standard sequence (don’t skip steps):

• Offer accepted → draft contract: The notary prepares the purchase contract with the agreed purchase price, fixtures, deadlines, and conditions.
• Notarization: You sign the contract before the notary; notary fees apply, and you’ll get a plain-language run-through of rights and obligations.
• Payment and approvals: After signing, the notary confirms conditions (e.g., no municipal right of first refusal) and then authorizes payment; you wire funds from a Euro/SEPA bank account.
• Land registry (Grundbuch): The notary files the transfer; once entered, you’re the legal owner. That entry—not the signing—transfers ownership.

Mandatory checks you should expect:

• Identity and residency status: Passport/ID; EU citizens sail through, while non-EU buyers may be asked for a residence permit or proof of residency status (title doesn’t require residency, but banks/compliance care).
• Proof of funds and financing: Lender pre-approval or bank statements; many lenders want a German IBAN account for disbursement and payments.
• Valuation and encumbrances: Bank or independent valuation; the notary verifies liens, easements, and other entries before filing.
• Insurance: Building insurance typically must be active by transfer; some lenders require proof before releasing funds.
• Compliance and deadlines: Anti-money-laundering questionnaires, payment windows, and any conditions precedent.

Keep a tidy document pack and a clear timeline and the process is straightforward: contract → sign → pay → register → keys.

The total purchase price (plus additional costs)

The sticker price is only the opening bid for your budget. The real number is purchase price + transaction costs, and those extras shift by federal state and by how you finance. Bake them in before you fall in love with a balcony.

• Taxes and legal must-haves: Property transfer tax (Grunderwerbsteuer) set by the state (Bavaria/Saxony among the lowest; Berlin/NRW among the higher), notary fees, and land registry (Grundbuch) charges. These three are non-negotiable if you want the keys.
• Intermediaries and services: Estate agent (Makler) fees on residential deals are often shared under current rules—check the contract to see your share—and consider surveys/technical inspections if the building’s older or quirky.
• Mortgage-related costs: Bank arrangement/processing fees, a lender valuation, and the notary/registry costs to record the Grundschuld (the land charge securing your loan). Locking your rate can also come with a price tag.
• Paperwork: Certified translations/apostilles, a sworn interpreter at the notary if needed, plus mandatory building insurance timed to the transfer of ownership.

Why the state matters: Add-ons vary by federal state and even by municipality; a Bavarian townhouse and a Berlin flat can have very different “all-in” totals—even if the headline price matches.

Financing your home

In the German property market, speed comes from preparation. A written pre-approval (or a broker who can get one fast) turns you from “interesting” to “credible”—especially in Berlin or Munich, where good listings vanish by lunch. Decide early whether you’ll work directly with German banks or via a mortgage broker who can shop terms and handle paperwork in one go.

How German mortgages work (the quick tour):

• Fixed term and amortization: You fix the interest rate for a set Zinsbindung (often 5–15 years) while you steadily repay principal (Annuitätendarlehen).
• What happens at the end: When the fix ends, you refinance, renegotiate, or pay the balance; early exits can trigger prepayment penalties.
• Prepayments: Many loans allow limited annual extra payments (Sondertilgung); check the exact percentage and limits before you sign.
• Rate watching: “Low interest rates” come in cycles—lock when the numbers work for your cash flow, not the internet’s.

What lenders look for (your pre-approval checklist):

• Income and stability: Employment contract, recent payslips, or self-employment tax returns; steady beats flashy.
• Credit record: SCHUFA if you have one; otherwise foreign credit reports and bank statements.
• Deposit vs. value (LTV): Your deposit size drives pricing and approvals; non-residents are often asked for higher equity.
• Valuation: The bank’s appraisal can cap the loan—even if you offered more—so build a buffer.
• KYC and logistics: Passport/ID, proof of funds, and usually a Euro (IBAN) account for disbursement and repayments.
• Residency and insurance: Your residency status can affect underwriting; buildings insurance must be in place for completion.

Broker or bank?

• Direct to bank: Fewer hands, potentially sharper rates if you fit their box.
• Mortgage broker: Access to multiple lenders, one document pack, and someone to nudge files through underwriting—often worth it for non-residents.

Due diligence you shouldn’t skip

Before you sprint toward keys, slow-walk the homework. A tidy file now protects your property value later—especially in major cities where charming buildings can hide un-charming surprises.

Title and land registry

• Grundbuch extract: Confirm the seller actually owns it (property ownership) and check for easements, liens, rights of way, or usufructs that outlive the sale.
• Condo split plan and bylaws (WEG): If you’re buying property in an apartment block, verify what’s yours vs common—and who must approve alterations.

Building health

• HOA minutes and reserves: Read the last 2–3 years of owners’ meeting minutes, reserve studies, and budgets. Look for special assessments, facade/roof plans, elevator upgrades, or delayed maintenance—classic city-center landmines.
• Energieausweis (energy certificate): Efficiency rating, heating type, and expected costs. Poor ratings can bite when house prices cool or energy spikes.
• New-build guarantees: For recent projects, confirm developer warranties and handover protocols (snag lists, deadlines).

Numbers that follow you

• Operating costs and arrears: Get a line-item schedule of monthly Hausgeld (HOA dues) and any unpaid amounts tied to the unit.
• Valuation reality check: Compare price per m² against recent comps; fast-rising rental properties nearby? Great—unless caps or renovations are looming.
• Tax angles: Ask your advisor about German tax touchpoints—deductible expenses for rentals, depreciation rules, and how income tax hits rental profit if you plan to let it.

Noise, rules, and quality of life

• House rules (Hausordnung): Quiet hours, renovation windows, pet policies—small print that becomes daily life.
• Renovation permissions: Kitchens, windows, balconies often need building approval; budget time and money.
• Sound & surroundings: Visit at different hours. A perfect street at noon can be a delivery corridor at 6 a.m.

Buy Smarter, Breathe Easier

Buying a home in Germany is process-driven. Get pre-approval before you fall in love, price the additional costs (transfer tax, notary, registry, agent, mortgage setup) into your budget from day one, and follow the notary-led steps in order. Do that—and keep your due-diligence file tight—and you’ll trade stress for keys.

Want clear, timely guidance as markets and rules shift? Subscribe to the Bright!Tax newsletter for smart, bite-size updates on expat money, mortgages, and cross-border tax—so your next decision is confident, not crowded.

Frequently Asked Questions