Buying Real Estate in Germany as an Austrian

As an Austrian, buying real estate in Germany

The German real estate market is increasingly popular among Austrian investors. With a stable economic situation, attractive returns, and legal equality as EU citizens, Germany offers Austrian buyers excellent opportunities for property acquisition. This comprehensive guide highlights all essential aspects of purchasing real estate in Germany and demonstrates how Austrians can successfully invest in German properties.

Why Germany is attractive for Austrian property buyers

Germany has established itself as one of the most stable real estate markets in Europe and offers Austrian investors numerous advantages. Thanks to legal equality within the EU, Austrian citizens can acquire real estate in Germany without special hurdles. They benefit from geographical proximity and significantly fewer restrictions than in their home market.

Stable economic situation and market opportunities

Germany is among the most stable economies in Europe and provides real estate investors with a solid foundation for long-term investments.

Key market data:

• Average rental yields between 3-5% depending on the region

• Wide range of urban apartments

• Strong demand in metropolitan areas such as Munich, Berlin, and Hamburg

• Attractive prices compared to Austrian urban centers

The German real estate market offers an impressive variety of investment opportunities.

Geographical proximity and practical advantages

The immediate proximity between Austria and Germany brings significant practical advantages for Austrian property buyers:

• Short travel distances

• No language barriersin negotiations, contracts, and administrative matters

• Similar legal and administrative structuressignificantly facilitate the purchasing process

• Easy accessibilityfor personal use as a vacation home or for rental management

Especially for Austrian investors from the border regions of Salzburg, Tyrol, or Vorarlberg, the proximity to Bavaria and Baden-Württemberg creates optimal conditions for real estate acquisition.

Legal requirements for Austrians

As EU citizens, Austrians enjoy the same rights as German nationals when purchasing real estate in Germany. EU freedom of movement ensures complete equal treatment without additional bureaucratic hurdles or approval processes.

No restrictions for EU citizens

The major advantage for Austrian buyers lies in the unrestricted entitlement to acquire real estate:

• Purchase without approval:Austrians can acquire real estate in Germany without separate permission

• All types of real estate:Both residential and commercial properties are available

• No price limits:There are no minimum or maximum limits on the purchase price.

• Multiple acquisitions:The purchase of multiple properties is possible without additional conditions.

This legal equality is significantly different from other countries, where foreigners are often subject to substantial restrictions. The Austrian residence remains unchanged by the property purchase in Germany.

Notarial certification and land registry entry

A significant difference from the Austrian legal situation is the mandatory notarial certification of the purchase contract. While in Austria judicial certifications are sufficient, Germany has a strict notarial requirement according to § 311b BGB.

The two-stage acquisition process:

1. Signing of the purchase contract:The notary reads out the contract, clarifies all conditions, and certifies the signatures.

2. Land registry entry:Only the entry in the German land register establishes full ownership rights.

Notary fees typically amount to about 1.5% of the purchase price and cover both the contract drafting and the land registry entry. The notary acts as a neutral intermediary and ensures the legal compliance of the entire purchase process.

Financing options

Austrian buyers generally have two established financing routes available: loans from German banks or financing through Austrian institutions. Both options come with specific advantages and disadvantages that should be carefully considered.

The recommended equity ratio is at least 20% of the purchase price, with Austrian banks preferring 25-30%.

German banks often offer attractive conditions for real estate financing to Austrian customers. Current interest rates for ten-year mortgages range between 3.8% and 4.5%, which is often more favorable than comparable Austrian offers.

Requirements for German bank loans:

Proof of regular income through pay slips or salary statements

• Credit check through German (SCHUFA) or Austrian (KSV1870) credit agencies

• Equity share of at least 10%, but often 20%

• Mortgage registration as security in the German land register

• A key advantage of German banks lies in the possibility of mortgage registration directly in the German land register. This first-ranking security allows for better conditions.

Financing through Austrian institutions

House bank financing offers Austrian buyers the advantage of familiar conditions and established banking relationships. Since both countries use the Euro, there are no currency risks in financing.

Particularities of Austrian bank financing:

Higher equity requirements (usually 25-30%)

• No mortgage registration possible in Germany

• Alternative securities such as Austrian real estate ownership required

• Alternative collateral such as Austrian real estate ownership required.

• Familiar processing with known contacts

Since Austrian banks cannot register security rights in the German land register, they require alternative securities. These can be real estate in Austria, other assets, or a higher equity share.

Tax aspects of real estate purchase

The tax burdens associated with real estate acquisition in Germany are the same as those for German buyers. The double taxation agreement between Germany and Austria prevents double taxation and clearly regulates the jurisdictions of both countries.

Real estate transfer tax by federal states

The real estate transfer tax represents the most significant one-time tax burden when purchasing real estate. It varies significantly between the individual federal states:

The property transfer tax is due once after the notarization and must be paid before the transfer of ownership. With a purchase price of 400,000 euros, costs therefore range between 14,000 euros (Bavaria) and 26,000 euros (Schleswig-Holstein).

Ongoing Taxes and Charges

After the acquisition, the property is subject to annual property tax, which is based on the assessed value and the respective municipal assessment rate. The federal government is planning a comprehensive property tax reform that may lead to various changes in the annual burden.

In case of renting the property:This is how you can rent your property legally and successfully

• German income tax liability on all rental income

• Creditability of German taxes against Austrian tax liability

• Possibility of tax depreciation for rented properties

• Double taxation agreement prevents double taxation

The double taxation agreement stipulates that income from German property rentals is generally taxed in Germany. The taxes paid there are credited against the Austrian tax liability, thus avoiding double taxation.

The Purchase Process Step by Step

The property purchase in Germany follows a standardized process, which typically takes 6-12 weeks from initial interest to key handover. Careful planning and the provision of all necessary documents significantly expedite the process.

Real estate search and viewing

The search for the suitable property usually begins online through established portals such as ImmoScout24 or Immowelt. These offer comprehensive search functions and detailed property information for initial market orientation. However, the best deals are often not listed on real estate portals but change hands off-market.With CDL Immobilienyou gain access to exactly these offers.

Proven search strategy:

• Online research for market overview and price comparisons

• Contact with local agents for market knowledge and exclusive offers

Local real estate experts often have exclusive offers and valuable market knowledge. They can assist Austrian buyers in identifying the best properties in their target region and professionally accompany the entire purchasing process.

Processing of the purchase contract and handover

After successfully selecting a property, the formal purchase process begins with the appointment for the notary. The entire process is legally clearly structured and provides high security for all parties involved.

Process of the purchase transaction:

1. Notary appointment:Reading of the contract, clarification of all conditions, and notarization

2. Registration of the transfer:Securing the buyer's position in the land register

3. Purchase price payment:Transfer after registration of the priority notice of conveyance

4. Transfer of ownership:Final registration in the land register of the new owner

5. Handover of keys:Physical handover after full payment of the purchase price

The priority notice of conveyance provides crucial protection for the buyer. It prevents the seller from selling or encumbering the property elsewhere before the purchase price has been fully paid.

Practical tips for Austrian buyers

A successful real estate purchase in Germany requires more than just financial resources. Professional advice, long-term planning, and the establishment of local contacts significantly contribute to success.

Utilize professional advice

The complexity of cross-border real estate transactions makes professional support almost indispensable. Various experts can assist Austrian buyers with specific aspects:

Recommended advice:

• Tax advisor:Cross-border tax planning and optimization

• Attorney:Purchase contract negotiations and legal protection

• Real estate experts:Like CDL Immobilien

• Civil engineer/assessor:Technical examination and valuation

An experienced tax advisor can develop tax-optimized structures even before the purchase and help minimize the overall burden. Attorneys assist in contract negotiations and can negotiate specific clauses for Austrian buyers.

Consider long-term planning

Successful real estate investors think about long-term use and possible exit strategies right from the purchase. This influences both the property selection and the financing structure.

Usage options for Austrian buyers:

• Capital investment:Rental for yield generation and value appreciation

• Cross-border commuters:Primary residence for professional activities in Germany

• Family investment:Property for future generations

• Personal use:Holiday home or retirement residence in Germany

The choice of location should consider the potential for value appreciation. Regions with a stable economic structure, good infrastructure, and demographic advantages offer the best long-term prospects. University towns, economic centers, and touristically developed areas are particularly attractive.

Strategic considerations:

• Analyze the value appreciation potential of various German regions

• Tax-optimized sales planning for potential future sale

• Examine the rental market and demand development in the target region

• Align personal life planning with real estate investment

Conclusion

The purchase of a property in Germany offers Austrian investors excellent opportunities with manageable risks. The legal equality as EU citizens, the stable German real estate market, and geographical proximity create ideal conditions for successful investments.

Key to success are careful preparation, sufficient equity capital, and support from experienced advisors. With the right strategy, Austrian buyers can benefit from the attractive opportunities of the German real estate market and make successful long-term investments.

Those wishing to buy real estate in Germany as Austrians should bring at least 10-20% equity capital, seek professional assistance, and develop a long-term perspective. By adhering to these fundamentals, nothing stands in the way of a successful property acquisition in Germany.

We are happy to assist you in the purchase of your property in Germany.