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EXPLAINED: The hidden costs of buying a house in Germany

Buying a house in a foreign country can be a stressful experience, so the last thing you want is any unforeseen costs taking you by surprise. Here's what you can expect when purchasing your dream home in Germany.

A couple is shown around a flat by an estate agent
A couple is shown around a flat by an estate agent in Hamburg. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

Germany is well known for being a nation of tenants, but with rents rising fast across the country, a significant number of people are opting for the security of home ownership over life in the rental market. 

Aside from escaping spiralling rents, there are numerous other reasons that drive around 45 percent of people to buy in Germany, like security in their old age, an inheritance for their children, or the freedom to truly make their home their own.

Though house prices have seen a steep increase in boom cities like Berlin and Munich in recent years, many towns and cities around the country are still very affordable to buy in – but there is a slight catch.

Along with all the paperwork, there are a number of additional costs you need to take into account when putting down money on a new home. Most of them affect everyone, but some are more likely to fall on the shoulders of foreigners. 

READ ALSO: Bargain ‘B-cities’: The places to buy property in Germany if you’re on a tight budget

In general, be prepared to budget an additional 10-15 percent of the house price for administrative and tax costs – though a lot does depend in which state you’ve opted to live in. Here are the costs you need to know about so you don’t get caught unawares.

Estate agent fees

Like death and taxes, paying estate agents fees seems to be an inevitability of selling a house almost anywhere in the world. In Germany, however, you also pay commission when buying one, as if to say a big thank you to the estate agent for being such a good salesperson. 

Up until December 23rd, 2020, this commission was often paid entirely by the purchaser, and could be as much as 7.14 percent of the purchase price in states like Berlin and Brandenburg, or 5.95 percent in places like Hesse. 

Since then, however, a new law stipulates that people selling houses in Germany can no longer funnel all these additional costs onto the buyer. Instead, if they hire an estate agent and draw up a contract with them, they must pay at least half of the arranged fee, while the buyer in turn pays no more than half.

An estate agent shows a man around a property
An estate agent shows a man around a property in Wittenberg, Brandenburg. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

That means, in Berlin for instance, the cost of commission could be reduced from a maximum of 7.14 percent of the property price (which would mean additional costs of €14,280 on a €200,000 house) to 3.57 percent (€7,140 for a €200,000 house). 

Estate agent fees do vary from state to state and contract to contract, so until you know what the agreement on your preferred house is, it’s best to budget for an additional 3-4 percent commission on top of the purchase price to be on the safe side. 

There are some exceptions, however: if you buy what’s known as a Kapitalanage – a form of investment property that you get rental income from, but cannot live in for a certain period of time – you will often find that you are spared from having to pay commission. Alternatively, if the owner of a property is looking for a quick sale, they may also try to make the property more attractive to buyers by making it commission-free – but those types of deals are unfortunately a rarity. 

Land transfer tax

After you’ve bought your new home, you will probably get a tax bill from the state you live in for your land transfer tax. This will once again be calculated as a percentage of the property price, and can be anywhere between 3.5 percent to 6.5 percent.

Below is the amount of land transfer tax you’ll have to budget for in each of the federal states. As you can see, you’d be paying €7,000 on top of a €200,000 house in Bavaria, whereas in Brandenburg, you’d have to budget a whopping €13,000.

                                            Federal State      Land transfer tax
                                      Bavaria and Saxony           3.5 percent
                                             Hamburg           4.5 percent
Baden-Württemburg, Bremen, Lower Saxony, Rhineland-Palatinate and Saxony Anhalt            5 percent
Berlin, Hesse and Mecklenburg Western Pomerania            6 percent
Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein & Thuringia            6.5 percent

Notary costs

Much like legal fees you might pay in other countries, expect to pay a fairly big sum for your notary. In Germany, you are legally required to have your contract drawn up and witnessed by a recognised notary.

Though they won’t physically go round the house to check if the house is physically solid like a surveyor might, their job is to draw up a contract that protects both the buyer and seller, check all the paperwork is correct, and review the records to see if there is any reason why the sale cannot go ahead. As mentioned, the notary also witnesses the contracts being signed and ensures that your ownership of that property is entered in the Land Registry (which is known as the Grundbuch in German).  

READ ALSO: Where in Germany it now pays to buy a home instead of renting

Once again, the fee for the notary is generally linked to the price of the house you’re purchasing, so you can expect to shell out up 1-1.5 percent on top of the house price. For our fictional €200,000 property, that would equate to €2,000-3,000. 

Interpreter / translator fees

If your German isn’t at an advanced level, you may need to hire an interpreter who will read the contract to you in your native language in the presence of the notary before you sign it. But beware: these skillful linguists tend to have a hefty price tag, so you’ll likely have to budget another €500 or so for this – or more if they have to travel.  

A woman connects with an interpreter via video link on her tablet.
A woman connects with an interpreter via video link on her tablet. Photo: picture alliance/dpa | Andreas Arnold

If you want to read the contract for yourself in English or another language beforehand, you might also consider getting a certified translation of it too. With translations of tricky legal texts often coming at a high cost, you should set aside at least a few hundred euros for this as well if you plan to go down this route, depending on the length and complexity of the contract.

Foreign currency exchange / banking costs 

Once again, this all depends on your circumstances, but if you’re using savings in a foreign currency to put down a deposit then you may have to reckon with exchange rates and bank charges as well.

Though you can’t control the foreign exchange markets, you can generally get the real exchange rate and pay fewer fees if you use a service like TransferWise rather than a traditional oversees bank transfer. When you’re spending thousands on a house, decisions like this may seem minor – but they can all help keep things within your budget.

If you want to see if the house you’ve got your eye on is really such a Snäpchen (bargain), this online calculator uses the property price and the federal state to estimate how much extra you’re likely to pay in additional costs. Bank fees and interpreting or translation costs aren’t included in the calculation, but it should help you get an idea of what you’re likely to be spending and what your house budget is. 

Finally, here’s some vocabulary that may come in useful for your house hunt – and deciphering the bills that come with it:

Makler – Estate agent

Provision – Commission

Notar – Notary

Grundbuchkosten – the cost of getting your name entered into the land registry

Gebühren – fees

Grunderwerbsteuer – Land transfer tax

Nebenkosten – additional costs

Dolmetscher – Interpreter

Member comments

  1. Still want to buy a house with all these parasites lining up to fleece you for a percentage by basically doing the job of a robot?
    Buy somewhere better.

  2. It is possible to find zero Estate agent fees at certain websites. The owner lists the property directly.
    And the translation cost could be more, 800 – 900. Don’t forget the 19% VAT!

  3. We bought a property in France and were told to calculate between 13-14% on top of the purchase price, which proved to be correct. The purchase price quoted includes the estate agents fee (between 5-7% depending on value of the property) plus the % above.
    In fact, purchasing in Spain is very similar, about an additional 14% above the purchase price.
    The difference to the UK is that here we can stipulate with the Notaire the date at which to exchange contracts whereas in the UK one is at the mercy of the conveyancing solicitor.

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For members


Why house prices in Munich are starting to fall

The real estate market in the southern German state of Bavaria is changing due to the precarious economic situation, a new report has found.

Why house prices in Munich are starting to fall

What’s happening?

Germany’s largest state – Bavaria – is known for many positive things, such as stunning nature, culture and festivals. But it also has a reputation for being an expensive place to live. Many cities, especially Munich, are notorious for having some of the highest rental and property costs in the country. 

But it looks like the trend of rising house prices is beginning to dampen. 

According to the latest report by the Real Estate Association Germany South Region (IVD Süd e.V.), inflation and increased mortgage interest rates have put an end to the period of significant hikes in the Bavarian real estate market – at least for the time being. 

“The rapidly growing financing costs and the uncertainties associated with the impending recession in Germany as a result of the Ukraine war are inhibiting the dynamics of market activity and, in particular, the price dynamics in the residential real estate market,” said Professor Stephan Kippes, head of the IVD market research institute.

It reflects a general trend that we’ve been starting to see in Germany as the tough economic situation bites. 

According to a recent study by property search portal ImmoScout24, the number of people buying houses in Germany fell dramatically in the second quarter of 2022. And In many of the major metropoles, property prices also went down as people struggled to find interested buyers.

READ ALSO: How property prices are dropping in major German cities 

Where can we see this trend?

The price changes can be seen clearly in the state capital Munich, reported regional broadcaster BR24.

According to the study, the average property price, which was €9,500 per square metre in spring, has now dropped to €9,450. 

In some Bavarian cities, the trend reversal is not yet as noticeable. In Nuremberg, for example, property prices are still rising but at a slower rate than previously seen. The price of a property in spring was on average €3,630 per square metre, and is now €3,710, according to the study. 

Experts say it shows how the situation is developing. 

“The state capital of Munich, where the first price declines for residential real estate were identified in the fall of 2022 for the first time in a long time, could serve as a seismograph for future developments in Bavaria’s large and medium-sized cities,” said Kippes. 

Homes in Erfurt, Thuringia.

Homes in Erfurt, Thuringia. Photo: picture alliance/dpa | Martin Schutt

Interest increases for buyers

At first glance, this development could seem tempting for those looking to buy property in Germany.

But Kippes points out that buyers are hardly benefitting from the decreasing prices – because interest rates have risen. 

“A few months ago, you could get an interest rate of 0.8 percent,” said Kippes. “If we take a purchase price of €500,000, let’s assume that €150,000 is equity and a €350,000 loan is needed; two percent repayment, 10 years fixed interest rate. Then, you would have paid €817, but today it would cost you €1,473.”

The IVD study said that the historically low-interest rate level of the past years in Germany “made it possible to compensate, at least partially, for the massive increases in purchase prices in many places”.

READ ALSO: The rules foreigners need to know when buying property in Germany 

“Now that the relief provided by low-interest rates has largely disappeared, but at the same time purchase prices have remained at dizzying heights, owner-occupiers in particular, who traditionally often finance with a high proportion of borrowed capital, are increasingly dropping out as buyers,” said the study.