For members


The rules foreigners need to know when buying property in Germany

If you are serious about buying a property in Germany, either to live in or as a form of investment, you'll need to know these important rules on everything from residency to taxes.

The rules foreigners need to know when buying property in Germany
A 'for sale' sign in the state of Brandeburg. Photo: dpa-Zentralbild | Soeren Stache

As we all know, property is generally a solid investment – as long as you have enough cash to afford the considerable up-front payments involved. 

Knowing whether now is the right time to buy is not easy. A recent drop in property prices in some German cities after years of dramatic price rises could indicate that there are deals to be had. On the other hand, the decision by central banks to put up interest rates in response to inflation could mean that taking out a mortgage will become less attractive.

But it’s not just the higher costs of borrowing that you should be aware of when buying a property. Additional costs, including taxes and real estate fees, could add a further 10 percent to the total spend on top of the actual price of your new home.

Meanwhile, people hoping to buy a property for themselves should be aware that sitting tenants are well protected. If you buy a property that is already let you will have to wait for months or even years before you are allowed to move in yourself.

Residency rules

The first thing to clear up, which will come as a relief to those who don’t hold German citizenship, is that there are no restrictions on foreigners buying property in Germany. That applies regardless of whether you are resident in the country or not.

Arguably, one downside of this light-touch approach is that it has helped fuel the massive surge in property prices that has taken place in recent years.

A report by Die Welt newspaper in 2018 found that almost half of property deals worth €10 million or more were carried out by foreign investors. Studies also suggest that the Italian mafia have bought billions of euros worth of German property in order to hide the source of their ill-gotten gains.


Housing under construction in Lower Saxony. Photo: Julian Stratenschulte

The biggest additional cost of purchasing a property in Germany comes in the form of the Grunderwerbssteuer (land transfer tax). This tax applies both for properties that have already been built and for building plots.

The size of this tax is set at the state level, meaning that someone buying in Saxony (tax rate 3.5%), for instance, will face a much lower tax bill than some buying in neighbouring Thuringia (tax rate 6.5%).

Those huge differences in rates mean that the tax on a property sold at €500,000 could end up being €15,000 more just a few kilometres down the road.


The states with the lowest Grunderwerbssteuer rates are Bavaria and Saxony, both of which haven’t raised the tax at all this century. Most other states have adjusted the rate over the past decade and purchasers should expect to pay an additional six percent of the purchase price to the taxman.

Debate has been raging in recent years about whether the size of the Grunderwerbssteuer is making it impossible for young people to get onto the property market. Studies show that it takes the average German four years to save to pay this sum alone, which often can’t be financed through a mortgage.

Some states, such as Bavaria, are pushing for a federal law which will free first-time buyers from paying the duty. The federal government has also promised to reform this tax but nothing is set in stone yet.

Estate agent fees

Up until recently, the person or company buying a property had to pay a huge commission of over seven percent of the purchase price to the estate agent. Coming on top of the land tax, that was a prohibitive cost for many people looking to get onto the property ladder.

But a law which was passed through the Bundestag in 2020 ensured that the estate agent fees would have to be split evenly between seller and buyer. Since then the buyer has “only” had to pay around 3.5 percent of the property price to the estate agent.

Experts advise though that one should try and negotiate a lower fee with the estate agent before the final contract is signed.

READ ALSO: How to sublet your apartment in Germany

Notary fees

Another notable cost involved in buying a property in Germany is the notary fee, which is the sum you give to the public office that ensures that the change of ownership becomes a matter of official record.

People who tear their hair out at the patchwork of rules across the German states will be relieved to know that the notary fee is set across the whole country at 1.5 percent of the purchase price.

Sitting tenants

A German couple view an unrented property. Photo: dpa/RTLZWEI, EndemolShine Germany | RTLZWEI

Another key thing to consider when buying a property is whether it has sitting tenants. 

If you are buying the property as a long-term investment there are several advantages to purchasing one which is already rented out, not least the fact that let properties tend to cost significantly less than unlet ones.

When you buy a let property the tenants and their rental contract come with it, which means you won’t have to deal with the hassle of finding a new tenant and agreeing on a new rental price.

On the other hand, German rental law ensures that tenants are protected against sudden hikes in their rental terms, meaning you might take over a property that is leased at under the current market value and find it hard to raise the rents. Rental law also protects tenants from eviction so as to prevent landlords from pushing them out in order to re-lease the property on more lucrative terms.

One of the few legitimate grounds for cancelling a rental contract is if you or an immediate family member plans to move into it, something known as Eigenbedarf (personal use). However, German rental law even gives some protection to sitting tenants in this scenario.

Typically a tenant who has been living in the property for a number of years needs to be given nine months’ notice before you can move in. In some states though, local laws give much more protection. In Berlin property owners are subject to a ten-year freeze on evicting a tenant starting from the point at which the property is purchased.

These complex rules surrounding tenancy rights mean that one it is advisable to consult a specialist lawyer about the particularities of local law before you make any such purchase.

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For members


Five common rental scams in Germany and how to avoid them

With the rental market in German cities like Berlin, Hamburg and Munich becoming increasingly competitive, scams involving rented apartments are getting more common. Here are the cons you might come across - and how to avoid them. 

Five common rental scams in Germany and how to avoid them

1. Fake adverts

The most common trick used in various scams is to put up adverts for apartments that don’t actually exist. These kinds of adverts have been found lurking on all of the major renting portals, including  Immowelt, Immoscout and Ebay Kleinanzeigen.

To entice potential victims, fraudsters put these fictional apartments in particularly desirable areas for surprisingly low rents. 

How to avoid this trick:

Firstly, ask yourself “is it too good to be true” – if the answer’s yes, it probably is. If the rental price is much lower than comparable apartments in the same area, then be on your guard.

If you suspect that an offer might be a fake, you can copy and search parts of the advertisement text and if you find it elsewhere, be sceptical.

Also – compare the photos with the description – contradictions are likely indicators of a scam. You can also use Google’s reverse image search to check whether images are used elsewhere (e.g. on the website of a furniture store). If this is the case, it’s likely that the ad is a fake. 

READ ALSO: EXPLAINED: The hidden costs of renting in Germany

2. Fraud with advance payment

One particularly widespread scam is requesting advanced payments. 

In a classic con of this kind, the “owner” contacts the person looking for an apartment and tells them that they are currently abroad and therefore can’t show them around the property. Instead, they offer to post the key for a fee that has to be transferred in advance. Particularly brazen rip-off artists will charge hundreds of euros for this service.

A similar trick involves asking for an advanced transfer of the deposit or the first month’s rent. 

The Hamburger Abendblatt recently reported such a case, involving a two-room apartment at an address where there were no apartments actually available for rent. The advertisement was placed on eBay-Kleinanzeigen, and the victim was asked to pay the deposit plus the first month’s rent to a “trust account”, with the promise that, if the customer didn’t like the apartment,  the money would be transferred back on the same day.

A realtor talks to prospective tenants at an apartment viewing. Photo: picture alliance/dpa | Tobias Hase

An emerging scam involving advanced payments is for fraudsters to rent out a flat via a portal such as Airbnb for a short period of time and to advertise on a portal for long-term rent. Then, they invite prospective tenants for viewing appointments with a supposed agent – and then agree to rent the place to all interested parties. The victims are then asked to pay, for example, a deposit and a transfer fee for the kitchen. 

How to avoid this trick:

Never pay anything before signing the lease and be very sceptical of owners who claim to be out of the country for whatever reason. 

If you have seen the apartment and feel pressure to make a payment before signing anything, do some background research on the owners. 

Check online whether the broker really exists, whether they have their own website with an Impressium and whether they have other apartments on offer.

When transferring money abroad: check the IBAN and country code and make sure it matches the country where the property is located. Never make cash transfers via companies like Western Union, as you won’t be able to get the money back in case of fraud.

READ ALSO: How much deposit do I have to pay when renting in Germany?

3. Phishing scams 

Another common method used by fraudsters is to send so-called phishing emails. Posing as the official rental portals or as reputable real estate agents, such emails will usually contain a request to log in  to the real estate portal via a link with your access data, or to open an attachment. 

If you log in via the link, however, you will be taken to a fake log-in page, which fraudsters can use to intercept your access data. Files attached to emails may also contain malware which can spy on your personal data.

How to avoid this trick:

Don’t open attachments ending in .exe in e-mails and don’t click on links without verifying the sender. Pay attention to the sender’s e-mail address – real estate scammers often use email addresses with conspicuous domains, such as [email protected]ü

Also, be sceptical if the email is written in bad German or English.

4. Identity Theft

Rather than demanding an immediate handover of cash, this kind of scam is more of a long-term venture. 

In this case, fraudsters will ask victims to send a copy of their passport or other personal documents such as pay slips and utility bills, by email. The biggest warning sign for this kind of scam is when you are asked to take a picture of yourself holding your ID card or passport.

A woman takes a photo of herself with her ID card.

A woman takes a photo of herself with her ID card. Photo: picture alliance/dpa/dpa-tmn | Andrea Warnecke

Fraudsters can then use this personal information to open bank accounts in your name, take out loans or conclude telephone contracts, and some have even managed to apply for credit cards with high credit limits and make high-value purchases in instalments. 

READ ALSO: Six confusing things about renting a flat in Germany

How to avoid this trick:

The problem with this scam is that potential renters are often legitimately asked by official agencies to provide proof of income and identity as part of the application process for the apartment. In fact, it can be a little overwhelming in Germany because so many essential documents are needed to rent a flat. It often feels like you’re handing over your soul. 

So the first golden rule is – don’t give any personal information unless specifically asked for it. If you are asked to send a passport copy or other personal data, make sure you are absolutely sure that the agent is trustworthy.

Ideally, this would be verified by meeting them in person, but if not, you can at least call the office or do some online research about the agency. 

A complete and easy-to-find imprint on the website, as well as other apartment adverts, is usually an indication of trustworthiness.

5. Charges for listings and viewings

With slim pickings often available on rental portals, one emerging (and alarming) form of trickery is to charge victims for “exclusive” listings and visits. 

In such cases, a prospective customer will respond to an advert, only to be told that it’s already rented. Then the broker will offer access to a list of “exclusive” properties for a fee of around €200. 

The lists and databases are however completely worthless and are simply copied from other adverts.

A related trick is when fraudsters offer an appointment for a visit, but demand a payment in advance to reserve a particular time slot.

How to avoid this trick:

While some agents may charge fees to help you find an apartment, these are usually the kind that advertised their paid services upfront. It is highly unusual for agencies to send unsolicited offers of paid listing and visits. 

I think I’ve been scammed – what should I do?

If you think an apartment advert looks like a fake or if the person claiming to be the owner is making suspicious requests, then get in touch with the portal operator and report them.

If you have been the victim of a scam, contact the police immediately – you can do this online in Germany, and if you have paid by credit card or direct debit: contact your bank.

READ ALSO: ‘Know your rights’ – The advice you need about renting in Germany