Buying a House in Germany [FULL GUIDE – 2024]

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Last Update: May 17, 2024 @ 12:31 pm

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If you are planning to be in Germany for a long time, buying a house in Germany can be a good investment. Through this article, we are trying to provide you with complete information that will help you buy a house in Germany. Information regarding the costs, buying procedures, and other tips are included in this article.

Where to buy a house in Germany?

Depending upon where you live in Germany, you'll find it different. People mostly prefer living in apartments in big cities in Germany, whereas people in suburban areas tend to live in houses. Also, big houses are present in big cities, but they are pretty expensive.

People in Germany buy properties for a lifetime. It is essential to keep in mind that the infrastructure should be good wherever you are looking to purchase a property. Transportation, schooling, grocery stores, and job opportunities also matter when looking for a property.

There is always an option for foreigners if they want to rent a property or instead look to buy one. Buying a house in Germany is a better option than renting a house. Keeping yourself familiar with the processes and information regarding buying a house in Germany is essential if you have plans.

Why consider buying a house in Germany?

It is a dream for people of different nationalities to own a property and is considered a significant feat in life. Also, people consider it a wise decision to invest in properties. Renting a property and paying rent to the property owner is more like making it easier for the landlord to pay his Mortgage. So, instead of renting a property, why don't you purchase the property yourself and pay the Mortgage yourself.
People in Germany usually think otherwise. Getting properties for rent is still very common here.

Personally, many locals that I know tend to opt for a rental property, although they easily can afford to buy their own house in Germany.

Many people find it a convenient option to rent a house. That is also because they've lived in the same house for quite along. Although in my opinion, this is because people in Germany do not prefer to take risks. Buying a house in Germany by taking a huge loan is considered risky by many people.

Less than 50% of the properties are owned by the people in Germany, which is also very low considering the European countries other than Germany. But, the low-interest rates are the reason the trend is now changing. Also, investors from overseas look at the real estate market as an excellent option to invest.
If we were able to invest, we would consider investing my money in real estate. Investing in real estate or purchasing a property is a good option. Here is why:

a. Not bounded by a Contract

If you live in a rented house, you do not have complete control to use the property the way you like it. It makes you think that you are paying a considerable amount in terms of rent, yet, if you need to make changes that you like, you are still unable to do that.

On the other hand, owning a house gives you the liberty to make changes whenever you like and make decisions at your convenience.

You can make structural changes within your home and decide or plan how the property should be utilized to the fullest. Also, you are not allowed to keep pets at times, but when you have your property, you can have pets of your choice.

The list goes on to what color, floor design or heating, etc., you want within the property.

b. Interest rate in Germany.

The European central bank has been offering loans for meager interest rates for some years now. A mortgage from the bank for as low as 3.7% – 4.5% can be received.

So, if you are planning to invest in property, this is a very safe option. This option is better instead of keeping the money in your bank account where you don't get any interest.

c. Stay as long as you want

You can never predict the future, even if you currently have a low-rent flat or apartment in Germany. Many people have been living in their rented flat for many years, but when the landlord needs to move into his flat, you'll be asked to vacate the space no matter what. The landlord may not have increased the rent over time, but it is hard to find another property within the budget when people need to move out.

If you live on your property, you do not have to worry about moving out if you are not ready. Also, you do not have to worry about whether the rent of the properties is increasing or not as you do not have to pay the rent anymore.

d. Rent free after Retirement

Buying a house in your late 20s and early 30s will help you have a rent-free retirement. Let's say that you bought a house with 20-30 years of Mortgage. So by the time you reach your retirement age, you don't have to pay a single penny for your accommodation.

If you have an average salary, then the amount of Pension you will get in retirement is not so much. With the current inflation, it might be hard to afford a rented apartment at that time. So it is wise to start thinking about buying a property in Germany.

e. Long term Investment

People usually prefer to invest in stock markets that are relatively riskier than the investment made in properties, as property value tends to increase over time and stays more stable. Also, there is no 25% capital gain tax to be paid when you plan to sell the property after keeping it for like 10 years. So, buying a house in Germany is a better investment and seems more attractive.

If we look at it this way, my neighbors rented a house for 1,500 Euros per month which is almost the same amount to be paid as a mortgage if I purchase a house. So, paying 1,500 Euros as a mortgage for your own house makes more sense than paying 1,500 Euros as monthly rent.

You can also consider the option to go for the buy-to-let property. Apart from the tax advantages after owning the property for 10 years, if the property's price increases, you can benefit from the capital gain. Also, there has been a hike in rent in big cities for the past couple of years. So, investing in a buy-to-let property is also a better option.

Can foreigners buy a house in Germany ?

Foreigners have full liberty to decide whether they want to invest in the property for self-living or for buy to let. If you have plans to live and stay in Germany, you can opt for buying a house or an apartment in Germany. Even if you move out from Germany, you can still always rent the property or sell it if you need to. If you can get the Mortgage, it does not matter if you are in Germany or not. You can still invest in a property in Germany.

Things you need to know before buying a House

a. Where to Find German Property to buy ?

In Germany, properties can be sold privately or through Immobilienmakler (estate agent). But, it's upon the buyer to find the property and reach out to the owner or their estate agent to proceed with the purchase.

You can look up agents through IVD, which is a national organization. Typically, an agent's fee is 3-7 % of the property's price, but make sure you check out who is going to pay the agent. Usually, the seller pays the estate agents but not every time.

It is preferred to search for the properties on online portals such as:

  • Immobile ( For German Properties only )
  • Immobilienscout24 ( For German Properties only )
  • ( For German Properties only )

Also, apart from online portals, properties can be searched through newspaper advertisements or estate agency websites. Typically, there is a sign on the property's window or a notice board in the Garden, but that is not every time. 

b. How to choose a Property?

It is essential to choose a property wisely and take some time to decide to purchase a property. People in Germany tend to live on the property for quite an extended period or their whole life. Areas that are preferred have quite a low turnover, so to purchase a property considering all aspects, one should expect the period to find a suitable property to be over 6 months to one year.

Also, there are specific legal requirements that a property should fulfill to be eligible for residence. Things like heating, roofing, windows, etc., matter when a property is to be sold or purchased. For this purpose, an architect or surveyor (Gutachter) can be hired to survey on your behalf.

c. How much equity required to buy a house in Germany?

Experts consider it a standard to have a 20 – 30% of the capital equity of the property's price. Depending upon the higher equity value, getting a mortgage on better terms is possible. So, it depends upon the property's price and how much you need to purchase a property. Equity includes the savings that you have in your bank. Still, it also includes any fixed securities, share or mutual funds, life insurance value, or any other property value.

d. What are the Additional Costs and Taxes while Buying a House in Germany?

Apart from what equity you have and getting a mortgage, the following costs should also be considered while buying a house in Germany. These costs need to be arranged separately from the equity you need and depend upon the purchase price of the property you are looking for.

If all these costs are added up, you can expect an amount of around 5–16% of the property's purchase price to be paid. As these costs are generally not financed with the Mortgage. So, it is essential to arrange these expenses apart from equity and Mortgage. Below mentioned are some costs which you should expect:

Cost Notes % of purchase price
Estate agent’s fee Depends if the cost is split between seller and buyer or who hires the agent. Up to 7%, plus 19% VAT
Registration and Notary’s Fees Interpreter cost should be added if required. 1.5 – 2.5%
Property Acquisition tax (Grunderwerbssteuer) Depends upon the region 3.5 – 6.5%

e. How Much is Estate Agent Fee (Maklerprovision) in Germany?

While buying a house in Germany, if a real estate agent (Makler) is involved, you may be required to contribute to the real estate agent's commission. According to the newly passed law in December 2020, a maximum of 50% of the fee can be contributed by the buyer. The cost is split at 50:50 between the seller and the buyer in most cases. Although, sometimes, the buyer pays the total fees if he has hired the agent.

The agent arranges a notary contract between the buyer and the seller once the parties agree on a property. After the contract has been completed, the buyer and seller have to pay the agent's fee.

f. How Much is Notary and Registration Fee?

Every time a property is purchased, it has to go through the notary service. Once the buyer and seller agree on the property purchase, a contract needs to be signed in the notary's presence.

On average, 1.5-3% of the property's purchase price has to be paid as a notary's fee. At the same time, the notary provides the services, including preparation of the contract, signing ceremony, and registering the property by entering the sale of the property in the land register.

g. How Much Property Acquisition Tax (Grunderwerbsteuer)?

Germany is also considered the country of taxes. So, to purchase a property, a property acquisition tax has to be paid, and property acquisition tax is charged by the federal states (Bundesland).

Within four weeks after the purchase is completed, a total of 3.5 to 6.5% of the purchase price has to be paid, depending on the state of the property.

h. How to Reduce Mortgage Cost?

Taking a mortgage while buying a house in Germany is a common practice. Postbank, DeutscheBank, and Commerzbank are central banks in Germany that offer mortgages and have mortgage advisers that help you through. It is advised to use a free online mortgage calculator as it can screen different offers from banks and can choose the best one for you.

It is advised to choose a mortgage that you can easily afford. Because if you fail to pay back the Mortgage, you will find it difficult to borrow in the future, and your property may be repossessed.

While taking a mortgage, it is advised to make a down payment of at least 20% of the property's price. The more you pay in terms of down payment, the better mortgage options you will be offered.

An option to make an additional annual payment of 5 – 10 % of the original mortgage amount is available in many loan contracts. This may also help reduce total interest payments, and you'll have to pay less in terms of interest if you make more payments annually.

i. Property Assessment Cost for the Old Construction (Altbau)

If you want to check whether the price of the property that you are planning to purchase is reasonable or not, you can evaluate the value of your property too. Property assessment can be done in different ways, and this assessment can cost up to 1000 of Euros.

If you plan to purchase an old property, there is also some added cost that you may need for repairs. If you pay for the expenses for the repair and maintenance of an investment property, please note that these expenses are tax-deductible against your rental income.

How to Calculate your Mortgage?

First things first, it is advised to get an insight into your Mortgage to proceed with purchasing the property. By calculating your Mortgage, you'll be able to know in what price range you can purchase a property and what total cost you'll have to pay.

Online calculator services like loanlink24 can help calculate a mortgage. These calculators can provide the best offers within minutes by comparing over 400 lenders and banks. Also, they provide services in English completely free.

Usually, mortgages take 25 – 30 years to settle. Generally, for the first five years, the interest rate is fixed. Also, variable interest rates and other loan periods are available as Germany does not have a risky mortgage compared to the US and UK.

Depending on your situation, your mortgage interest may be tax-deductible. However, this does not benefit in terms of capital gains tax, which benefits those staying for a more extended period.

Step of Buying a House in Germany

We have covered why it is wise to buy a house in Germany and mentioned all the things you should know before taking this step. These are the steps you need to follow to find your dream house.

a. Get your Finance Ready

While buying a house in Germany, you should start by understanding your financial situation. It is essential to know how much you can get in principle, for this one should start by calculating the Mortgage. After this, once they can get an idea about what range they should look up for properties.

Using online mortgage calculators, one can easily find suitable options. Just provide some basic information along with the property's price, and the online calculator will list down your options for you. You can always get advice from a financial adviser to get an insight into each option.

b. Search for the Property

Searching for a property requires time as the decision has to be made considering multiple factors. For properties in good areas, the turnover is relatively slow. So, to get the desired property, one should be patient.

To better understand a market, one should observe the market for an extended period. Apart from this, signing up on online portals can benefit too. Whenever there is a new property added, you'll get notified. Keep looking in the newspapers frequently, and also let people in your circle know what type of property you're looking for to get the results. You can opt for hiring an estate agent too.

c. A pre-approval for Mortgage can also Benefit

A pre-approved mortgage offer can be advantageous as you have already set your budget. Loanlink24 offer this. This can help as you don't have to wait once you find the desired property. Sellers will prefer you compared to those who haven't secured their finances yet to proceed with the purchase.

d. Getting Agreed on the Price with the seller 

Start viewing the properties of interest. It is advised to take a visit with a friend or colleague. Also, try visiting the properties in daylight to get a proper insight.

Take pictures, and also take measuring tape if it is required. You can also take someone who is an expert to provide an idea about the structure and provide technical analysis of the property.

After you finalize the property you wish to purchase, it is advised to get an agreement on price and terms and conditions with the seller. Make a suitable offer. A notary can set up a sale contract accordingly afterward.

e. Get the Mortgage Finalized

Now that you have finalized which property to purchase, you have all the necessary details regarding the price. Now you can return to the banks or lenders and get some official offers. After comparing your options, you can now decide which one to go for and finalize your Mortgage.

f. Sign the contract

It is compulsory to sign the contracts while a notary is present. As the contracts are in the German language, you must have a complete understanding before signing the contract and, if necessary, bring an interpreter.

You hold the right to have a translator, but you'll have to pay for them yourself if you do so. Also, in some cases, you may find a bilingual notary.

g. Register the purchase

After four weeks, a property sales tax needs to be paid against the purchase. As the property is now officially transferred. It is essential to remember that just signing the contract isn't enough. The notary should also register the property. Notary itself takes care of this process, and the government will check for the outstanding issues regarding the sale.

As the notary has made a check already, there is a rare chance that an issue will arise. But if there is an issue found, the property transfer cannot be completed until the issue is resolved. To stay safe, it is advised to transfer the money into the notary's account before approaching the property seller.


In this article, we have tried to give you insight into what steps you need to keep in mind while you plan to purchase a property in Germany. Buying a house in Germany looks attractive at first, but it's not the case every time.

We expect that by reading our guide, you might have a lot of answers to the questions you may have had before reading this article. So, why wait for more? Let's start by deciding your budget and how much Mortgage you can afford easily.

Frequently Asked Questions (FAQ)

How to get a notary appointment in Germany?

In order to complete the sale of the property legally, getting it through public notary (notar) is compulsory. Notary should be impartial and act as a middleman between the parties.

Notary is responsible to make sure that there is no pending issue that can halt the sale of the property. On the other hand the notary is not responsible to inspect the property and demand information which the seller has. But the notary's responsibility is to make sure the paperwork is accurate and the sale deed has been witnessed in the presence of the notary.

You have the authority to choose your notary also, if the notary speaks your language, it is advised to go for that. On the other hand your embassy might provide you with the list of translators that they recommend.

How much is the average price of buying a house in Germany ?

Prices of properties in Germany basically depend upon the state or city in which you are looking for a property. Cost of buying a house in Germany has increased too much in the past decade just like the rental cost in big cities. In 2023, the average cost of a finished house is 2,971 euros per square meter. In Hamburg, housing will cost you 5,781 € per m², while in Munich, it's as high as 10,420 € per m². This has happened because of the demand and supply gap. The demand for rental and purchase property have increased so much and the supply in the market is very low. 

How to sell a house in Germany?

In case you decide to relocate, it is important for you to know how to sell a property. Selling a property in Germany will cost less relatively as the cost of most transactions are on the buyer of the property.

However, if you have owned the property for less than 10 years, you must pay a 25% capital gains tax once the property is sold. Unless you own a property in an attractive area, it will be difficult to sell the property as the market is comparatively slow in non-popular areas.

What is the ideal age of buying a house in Germany?

It is recommended to start looking in your late 20s and early 30s.  First reason is that bank like people who have enough service years before they retire. Second reason is that you will be rent free before your retirement. 

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