Can foreigners buy property in Germany remotely?

Can foreigners buy property in Germany remotely?


Since 2016 the German real estate market has seen a significant increase in demand from overseas buyers. The value proposition of affordable housing, strong corporate governance and low vacancy rates in Germany have an ideal framework for real estate investors to generate rental income and capital appreciation in a stable environment. And many overseas buyers have spotted this unique opportunity.

The question is how do I best operate from overseas and how do I overcome the the language barrier and the complexities around taxation and management of the property.

Make sense of the price in Germany

A lot of people are confronted with indecision and an asymmetric information profile due to the lack of transparency in pricing. Germany is one of the few countries that do not offer a public central pricing registry. So how do you make sense of the price? There are multiple ways to overcome this problem but the most effective way in my opinion is to use Now for the people who do not speak German there is a solution for that. If you use Chrome as a browser, you can click on the translate button on the right side of the searching box and it automatically translates the website in your preferred language. Preisatlas is a wonderful tool that helps you understand what the average price of the street is and classifies the neighbourhood with a different color scheme in below average, mediocre, good and very good. So with Preisatlas you should be able to make sense of the prices in the area.

Realistic assumptions on capital appreciation and rental income in Germany

Numbers can lie, facts don’t lie. Many times real estate agents present numbers on rental growth and capital appreciation. Now for someone who is not familiar with the German real estate market, it will be hard to verify those numbers and a wrong assumption can be a costly mistake for your investment. Hence it is very very important to go through those numbers. Immowelt does a great job to help you understand historical pricing, rental growth, current rents and the current supply/demand for different sizes of apartments in each district. Again is only in German, but with the chrome browser and the translation tool you will be able to navigate in your preferred language. For those who are still struggling. Send me a message and I will do a quick session with you.

360 Virtual Property Tours in Germany

With the available technology it is easy to get an immediate insight of the building and more often you can ask agents to give you a video call to complete virtual tours while you are being home.

Client wants to sign the property and sales agreement at their living place (outside of Germany)

German consular officers are empowered by statute to undertake such legal acts for the purposes of German law (section 2 of the Konsulargesetz (Consular Act)). Documents executed before a consular officer rank equally with those executed before a notary in Germany (section 10 (2) Konsulargesetz). The fees are levied in accordance with the Auslandskostenverordnung (Foreign Costs Ordinance) and are roughly equivalent to those charged by German notaries.A signature or manual sign is authenticated by being acknowledged or executed in the presence of a consular officer. Signatures on documents to be kept on file at a court may only be authenticated by being executed in the presence of a consular officer. In both cases, the person whose signature or manual sign is to be authenticated must appear in person.

Getting financing from a German bank

As a Non-European citizen it is possible to apply for a mortgage remotely but it will limit your options of available banks. Each German bank has to comply with German and European laws, especially when it comes to KYC (Know your client). With the usage of digital providers you will be able to verify yourself in front of a camera, where you have to show your passport from different angles to the person on the other end of the camera. Believe me or not this is common practice in many other countries, but in Germany the digital transition is still at the beginning. After that you will be able to sign the mortgage application per postal service.

Hiring a property management company in Germany

I can only recommend any overseas buyer to engage a property management company managing your property business in Germany. You don’t want to get involved and will be difficult for you to manage if you are in different time zones.

Obviously you will have to pay extra and in addition to the WEG-Verwaltung, but you can make sure that you will get your rental income on time, tenants will be swapped if necessary, all the administration work will be done for you and there is a full time customer relationship manager installed helping your tenants with enquiries. And believe me tenants will appreciate you for that. A happy tenant means your rental income is guaranteed.

Postal address in Germany

In order to transact in property in Germany, most real estate developer will ask you to provide a German postal address because they will send you invoices and if you won’t pay those invoices, the real estate developer will have issues proving that you actually received those invoices. So they would like to avoid the legal risk and will only proceed in the transaction if you have a German postal address. Now having a German postal address has another benefit. During the course of the transaction you will receive a lot of letters from the tax authority to pay the stamp duty, the land registry fee etc. and at a later stage you will have to pay a quarterly property tax. And let me tell you this. You don’t want to miss those payments. So it really comes handy to have letters send to Germany. You won’t be late in payment and you reduce the risk of losing letters instead of having them send in your home country. There are several providers out there, but I can recommend to work with a property management company or a tax account in Germany. There are some good lawyers as well, but you will have to pay extra.

How to buy German Real Estate?