German constitutional authorities fear the villa in the exclusive Berlin district of Zehlendorf could become a centre for neo-Nazi activities throughout Europe, according to Spiegel.
A Berlin police spokesman declined to comment.
According to Spiegel, Swedish businessman Patrik Brinkmann acquired the property in April 2007 as a trustee of his wife, calling the purchase “purely private.”
German intelligence agents view Brinkmann as a leading figure among right-wing extremists around the world, according to the magazine.
Brinkmann founded the Continent Europe Foundation in 2004 in Sweden. Spiegel describes the group as a hub for extremists from around Europe, with two functionaries from Germany's neo-Nazi National Democratic Party on its advisory board.
Based until now only at a postal box in the Swedish city of Jönköping, the foundation describes itself as seeking to establish a “greater European civilization” that will include Russia.