For members


It’s not that hard: the beginner’s guide to buying a home in Germany

One of the strongest signs which show that expats are keen on planting roots in Germany is purchasing a home here. It’s not as scary or time-consuming as you might think, and in the end could save you a lot of energy and euros.

It's not that hard: the beginner's guide to buying a home in Germany
Photo: DPA

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In Germany, nearly 50 percent of people rent a home rather than buy one, much lower than the EU average of 70 percent, according to Günter Fischer, the managing director of Engel & Völkers, a Berlin-based real estate consultancy. In Berlin, it’s an even higher number: 70 percent of residents rent a home versus 30 percent who buy one.

This is attributed largely to strong legal protections for renters, rent control laws in many German cities, and the lack of special benefits for buyers. Unlike in some European countries such as Spain, one cannot deduct the cost of one's mortgage payments from taxes in Germany.

It’s also due to available new units: home-building boomed in the 1950s and 1960s due to a post-war tax which subsidized their construction. But new building of homes significantly slowed down in the years that followed, despite the fact that Germany has far less living space than other countries.

Germany, for example, has one-ninth the living area that the US has. Even in the suburbs of many cities, new developments are largely limited to connected townhouses, meaning that a person might have to walk a sizeable distance to park their car in an underground garage.

Prices are rising, but there’s hope

In large cities such as Berlin, ubiquitous construction cranes may paint a picture that housing is being built non-stop. But there’s still a shortage of supply to keep up with demand, as Germany currently lacks one million housing units, according to a January 2018 Deutsche Bank study.

This lack of availability means that home and apartment prices have grown by 80 percent in major cities such as Hamburg, Berlin and Munich from 2009 to 2017.

But housing developers have taken note, leading to another building upsurge right now: in 2017, the number of newly completed residential units rose to more than 300,000 for the first time in the current cycle, and by the end of 2018, it is expected to climb to 335,000.


Yet as demand remains high, prices will also continue on an upward spiral, making now a good time to buy in most cities, when still low interest rates can be locked into the purchase price of the home, according to Fischer. He dismissed worries about a potential bubble, pointing to the stable Hypothek (mortgage) market that has seen little growth in the past 17 years, and a steady supply of new homes being built.

Photo: DPA

When you should buy a home

Upon arriving in Germany four years ago, James Poisso and his wife Jen Multari thought it would simply be easier to rent, even though they planned to stay in the Wiesbaden area with their two children for an indefinite amount of time. Yet they quickly saw that was not the case when, a year after finally feeling settled in their home, their landlord contacted them, saying he would reclaim the home with his family in three months.

While the family was able to extend their move-out date, they quickly began searching for a new home, but decided that – going forward – it would be far easier to buy rather than rent, despite the initial extra efforts picking a home would cost.

They first turned to real estate websites, as they were accustomed to doing in the US but often were not contacted by an agent, or they were told that the property was no longer available.

At the few home viewings offered to them, they saw older properties that required a lot of work – in Germany, it’s typical that a person “constructs” their home to their liking, from the bathroom to the kitchen, after purchasing it.

Frustrated by the options, they turned to a local Facebook group and found another American expat family who were selling their home. They avoided the six to seven percent tax that is usually spent on an Immobilienmakler, or real estate agent, and purchased the home – a rare airy house with 3.5 bedrooms and a large yard for their children.

According to Fischer, for expats who plan to stay in Germany longer than four years, it can be a more sound decision to buy rather than rent. If you plan to stay in Germany for less than a decade, it might be wiser to rent.

A capital gains tax (Begeltungsteuer) of 25 percent applies to any home purchased and sold in less than 10 years, yet expats can continue to rent out their homes if they do move before that time. They should take note, however, that property management companies are not as common in Germany as they are in some other countries such as the US and Canada.

Where to buy

In Germany, the three factors which most strongly influence the price of a home are “location, location and location,” said Fischer. He pointed to identical apartment units being sold only blocks away, one in the centre of Potsdamer Platz in Berlin and another on a side street.

The costs went down by at least 30 percent by simply shifting to a less central location. In cities, he says, housing units located next to public transportation hubs tend to have the highest prices, with the costs decreasing based on the travel time to the nearest U-Bahn or S-Bahn station.

In addition to being located close to good public transportation, families should look at the distance it takes to reach schools, their place of employment and recreational facilities. If in an area lacking good bus or train connections, they should ask themselves whether using a car or bicycle can compensate for the inconvenience.

Photo: DPA

Keeping your credit in check

Normally a person is required to show their prior credit through a German credit check called a SHUFA, says Fischer, which many expats arriving in Germany don’t yet have. But even more important, he says, is capital already in the bank. A person should be able to put down 20 percent on a house, plus additional costs (Nebenskosten). If these conditions are met, a bank is more likely to finance the rest, even if you don’t have all of the costs met.

There are, however, banks which are willing to finance home loans of 100 percent, as Poisso and Multari found when they secured a 15-year loan on their home. Yet the individual who has taken out the loan has to continue to put down the costs for at least 10 years, even if they acquire the rest of the money. It is the bank’s way of continuing to collect interest.

The interest rate is also decided by someone’s residency status: Poisso and Multari will only next year acquire permanent residency, meaning that – on their current temporary residency permit – they have to pay a higher interest rate to account for what their bank assessed as a risk. “We’re locked into this rate for 14 more years, but after 10 they said we could renegotiate,” says Multari.

Expats coming from countries such as the US might be used to paying a yearly property tax which is assessed each year based on the current price of the home. In Germany, there is only a one-time tax, called the Grundsteuer. Prospective buyers, however, should find out if the street in front of their home will be reconstructed anytime soon. If so, the neighbours are liable for the costs, which could amount to upwards of €20,000.

Dealing with German bureaucracy

Simply signing a contract is not enough to transfer a property into someone’s name. The contract first needs to be signed in the presence of a notary – with a legally authorized translator if the buyer does not speak German.

Before meeting with the notary, the new ownership and current description of the property has to be recorded at a register at a local district courthouse.

Even if a house is transferred privately, the notary fees amount to about 1.2 to 1.5 percent of the purchase price, in addition to a property transfer tax of 3.5 to 6.5 percent, as well as registration fees of up to 1.2 percent.

But those costs vary from city by city, with extra local taxes which could be levied on the property. “Be prepared to pay a lot more than what you expect. But then that's usually it,” says Poisso.

The Wiesbaden-based couple added that after the purchase of their home, the only thing left to worry about was how to decorate it. 

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For members


What foreign parents in Germany need to know about Sprach-Kitas

Germany has a number of specialised nursery schools that focus primarily on helping children with their German language skills. Here's what foreigners need to know about them.

What foreign parents in Germany need to know about Sprach-Kitas

What even is a Sprach-Kita? 

A “Sprach-Kita”, or Language Kindergarten, is a special type of nursery school that’s been around in Germany since 2016 under the government’s Sprach-Kita Programme. The main aim is to help young children build up their German language skills to a level that will allow them to succeed at school. 

How is this different to a normal Kita or daycare centre?

Unlike most Kindergartens in Germany, Sprach-Kitas employ staff who are specifically trained in language teaching and acquisition. These specialists are paid for through Sprach-Kita Programme funding and help to shape the environment of the nursery school, making it easier for children to develop their German skills in an everyday setting.

The schools also have access to external support and advice on catering to children with language setbacks, and may work closely with parents to encourage further language development at home. 

Since the scheme was set up in 2016, around 7,000 nursery schools have successfully applied for “Sprach-Kita” status and received at least €25,000 funding through the programme. These were mostly Kitas that had already taken in a higher-than-average number of children from foreign backgrounds, such as those in popular migrant or expat areas.

Sprach-Kitas will generally be much more diverse and focus most heavily on children’s language skills, in addition to teaching young kids about cultural inclusivity.  

READ ALSO: ‘Multilingualism is an enrichment, not a deficit’: Raising bilingual kids in Germany

Who are Sprach-Kitas for?

Any young child in Germany is allowed to go to a Sprach-Kita, but the main target audience for these specialised nurseries are the children of foreign parents.

In households where German isn’t the main language spoken, children may struggle to keep up with their classmates at school due to their lower level of German fluency. That could be because the child has two international parents – such as a French mum and an English dad – or because the child has more contact with a parent who doesn’t speak German. 

According to recent statistics, around one in five nursery-age children in Germany doesn’t speak German with their parents at home. That equates to 675,000 children in total. In addition, around 40 percent of nursery school children come from a migrant background. 

Through the Sprach-Kita Programme, government is hoping to help these children integrate at an early age to set them up fully for life in Germany. 

READ ALSO: EXPLAINED: The rise in multilingual children in Germany

Do I have to pay for a Sprach-Kita? 

Parents usually have to pay a monthly fee for their child to attend a German nursery school – and the same applies to Sprach-Kitas. The fee structure is generally set by the local government, meaning it can vary widely across different regions of the country.

However, you won’t pay any more (or less) for a Sprach-Kita than you would for an ordinary nursery school. 

Where can I find a Sprach-Kita?

Around one in eight Kindergartens in Germany is currently a Sprach-Kita, meaning they aren’t particularly hard to find.

To look for one near you, the best thing to do is to hop onto the government website and look on this interactive map detailing all of the Sprach-Kitas in Germany. 

Children ride tricycles at a German kindergarten.

Children ride tricycles at a German kindergarten. Photo: picture alliance/dpa/mauritius images / Westend61 / M | Westend61 / Mareen Fischinger

However, partly due to staffing shortages, Kita places in Germany are highly competitive right now – so securing a place may involve getting in touch with a number of them at an early date. 

READ ALSO: How can Germany improve its Kitas amid teacher shortage?

Is there anything else I need to know?

Currently, the funding for the Sprach-Kita Programme is due to end at the end of 2022 – and it’s unclear what the fate of the existing language-focused nursery schools will be after this happens.

Though the three parties of the traffic-light coalition had pledged to extend the scheme in their coalition contract, it appears that the programme was one of the first victims of savage negotiations over next year’s budget.

That means the federal government are now hoping to transfer the responsibility for funding the language support over to the 16 states.  

“Responsibility in the area of daycare for children lies with the states and cannot be permanently financed by federal funding programmes,” a spokeswoman for the Family Ministry told Welt. 

The Ministry for Families has also pledged to make language acquisition a cornerstone of its forthcoming Good Childcare Act, which will see at least €2 billion in federal funding made available for nurseries in 2023 and 2024. 

That could make it possible for existing Sprach-Kitas to remain in place as specialised centres for language support.