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Residential Buyers Guide

for Germany

  deutsche Seite Mortgage rates
Taxes and Subsidies
The notary / land registry
Insurance
Commission fees
 

Legend Buyers 
 
 
 

Mortgage rates
Mortgage rates have dropped to the lowest point in the last 20 years, but still there can be significant differences concerning mortgage rates. In addition, most banks require that buyers have at least 20% of the purchase price as a cash downpayment.
 

Taxes and Subsidies
The tax on real estate transactions (Grunderwerbsteuer) is 3.5% of the purchase price.

The notary / land registry
Once the buyer and seller have agreed on a purchase price, an appointment is arranged at the notary for the final signing of the contract. The notary is legally bound to act as an impartial middleman between the buyer and the seller. Among other things, the notary registers the change of ownership with the munipicial government and enters the property in the land registry. The registry notes the owner of the land, mortgages on the property, and any other restrictions on the property.
 

Insurance

House Insurance

In Germany a Household Insurance, covering fire, storm, floods, theft contents of your home, is not required by law. Nevertheless, it is recommended and some landlords may also ask for confirmation of it. If necessary you should take out an additional policy to cover your valuables. A Personal Liability Insurance ("Private Haftpflichtversicherung") covers damages you may cause to your neighbours' property or to a third party. If you rent a house or an apartment this insurance is highly recommended. In the event of damage, contact your insurance agent immediately by phone and by registered letter. In the case of theft you will be obliged to prove what was stolen. Receipts, inventories, guarantees, and photos are very helpful.

Health Insurance

In Germany health insurance is obligatory. You have the option between several private insurance companies and a National Health Insurance program which is subsidised by the government and by contributions from employers, employees, and professionals. Foreign residents can also be covered. Your company is responsible for completing the necessary formalities, although you may also have to register yourself with the "Bundesversicherungsanstalt für Angestellte BfA". A Social Insurance card will be issued, bearing your social security number. Every time you need to apply for benefits, or to receive a social security reimbursement, you will be asked for this number.

With your Health Insurance card you can visit general practitioners and specialists without paying any fee, if they collaborate with your Insurance Company.

Car Insurance

An unlimited third party liability insurance ( "Haftpflichtversicherung") policy is compulsory for all automobiles entering Germany. As a proof of insurance, the owner must present an international motor insurance certificate green if the policy is purchased in Europe, ("Grüne Karte") showing that the vehicle is insured in Germany.

If you want to benefit from a German insurer's bonus (discount), you must provide proof of your previous insurance record. Try to have your former insurance company - not your agent - at home send you a letter confirming your insurance record. The further back you can go the better.

Policy Renewal

In general, a German policy is renewed automatically from year to year. If you do not wish to renew the policy you must inform your insurance company. If you do not receive proper notice of cancellation up to three months before the expiry date, your policy will continue in force for another year and you will be obliged to pay the premium.

If you do not wish to EXTEND the policy notify your insurance company 3 months before the expiry date by writing.

See also www.netspace.net.au. It is more detailed and with important vocabulary (German-English) concerning these topics


Commission fees
The commission fee varies in between 3-5% of the purchase price payable by the buyer.
Sometimes an offer is free of commission for buyers In this case the fee is included in the purchase price.

Legend Buyers

Abschreibung:                  depreciation/amount/written off 

Anschaffungskosten:        acquisition costs 

Bürgschaft:                      surety, guarantee 

Courtage:                         commision 

Eigenheimförderung:         subsidy available for buying a home for personal use 

Eigentümer:                     owner 

Förderungsgrundbetrag:    amount of base subsidy 

Grundbuch:                     land-registry 

Grundbucheintrag:           entry in land-registry 

Grunderwerbssteuer:        tax on real estate transactions 

Notarielle Beurkundung:   notarization 

Steuervergünstigung:        tax concession / income tax relief 

Wertsteigerung:               appreciation 

Zwischenfinanzierung:      bridging loan 
 
 

 

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