Frequently Asked Questions (FAQ)
Below you will find answers to questions which are frequently asked by our customers. Click on a question to see the answer. If you have further questions you are of course very welcome to contact us directly.
General questions
Can foreigners own property in Berlin?
Will it be a good investment?
Which are the most attractive neighbourhoods in Berlin?
What is the general price range?
Why not use a German real estate agent?
Buying property
How do I secure a particular property?
What are the typical procedures of a property sale?
What percentage downpayment is required?
What is the sales commission and what other costs will there be?
What is ‘proof of finance’ and why is it necessary?
How much tax do I have to pay?
How much tax do I have to pay when re-selling the property?
Do I need a German solicitor?
Can I buy a property together with other people?
Costs of renting the property
Calculate your monthly expenses
About the properties
How big are the apartments?
What does Altbau and Neubau mean?
What is meant by core refurbishment?
Why are so few finished apartments for sale?
How do I know that the construction or refurbishments are done properly?
If I buy an apartment in a refurbishment project, when will my apartment be ready for occupation?
What’s up with German kitchens?
Are the properties wired for cable TV and Internet?
Where can I buy furniture?
General - back -
Can foreigners own property in Berlin?
Yes, any foreigner is allowed to own real estate in Berlin. The ownership is documented by a public notary who is responsible for the lodgement and registration of all documents including the title deed.
Residence in Berlin is not required, the owner is free to use the property full time, as a private holiday property or for rental. - back -
Will it be a good investment?
Newly renovated apartments in a good location will almost always be a good investment. As with other larger cities, most people desire to live close to the city centre. The great majority of BoligBerlin’s properties are therefore to be found near or in the inner city areas such as Mitte, Prenzlauer Berg or Friedrichshain.
Property prices are still low in Berlin compared to other large European cities and this combined with the dramatic development of the city as the capital of Germany are attracting many foreigners as well as Germans from other parts of the country to Berlin.
The rental market is also improving with rents increasing significantly in the last couple of years. It is, in other words, very likely that property prices will continue to increase for the next many years in step with the steady increase in private ownership of property in the German capital. - back -
Which are the most attractive neighbourhoods in Berlin?
The former East German areas of the inner city, Mitte, Prenzlauer Berg and Friedrichshain have become very popular during the last few years. Here you will find numerous cobbled-stoned streets with attractive outdoor restaurants, street cafes and exciting new galleries.
Apartments in the inner-city areas of Prenzlauer Berg, Mitte, Friedrichshain and Charlottenburg fetch the best prices and have seen the greatest price increases in the last few years. - back -
What is the general price range?
The square metre price in Berlin has been increasing steadily, with the exception of earlier developments in the outskirts of the city based on concrete tower blocks, which are rapidly deteriorating where prices are tending not to appreciate.
Attractive apartments near the city centre are always in demand leading to steady price increases over the years. In 2006 it was possible to secure a completely renovated apartment in, for example, Friedrichshain for only EUR 1500 per square meter. Today the average square metre prices are up around EUR 2500 in Friedrichshain and even higher in Prenzlauer Berg and Mitte.
In spite of this increase, there is still the potential for further increases according to several independent German property experts and prices will continue to increase over the next many years. One main argument is that the Berlin property prices are still very low compared to other major European capitals and large cities. - back -
Why not use a German real estate agent?
German real estate agents traditionally earn their fees from creating the contact between the seller and the purchaser. Other services are therefore not necessarily included.
It is necessary to be fairly fluent in German as the German real estate agents generally do not speak other languages and may not know much about the regulations, financial options, equity rules and other conditions which may affect a foreign purchaser.
In addition, there are no savings in using a German real estate as BoligBerlin does not charge anything extra for providing its services. - back -
Buying property - back -
How do I secure a particular property?
A big problem concerning buying real estate in Berlin is that there are often several agents offering the same apartments, and many foreign buyers using German real estate agents have had the experience of an apartment which they had thought reserved in their name, already having been sold to a third party.
We potentially face the same situation at BoligBerlin, but we place great emphasis on guaranteeing our customers that a reserved apartment actually means that it is reserved and it is available for sale. In some cases, a reservation fee is required and we view this as a positive as it generally guarantees the reservation can lead to a sale.
We strongly recommend that a reservation is made immediately should you find a property you like. If you are required to pay a reservation fee, the fee may partly be refunded should you decide not to proceed with the purchase. The seller is allowed to keep a portion of the reservation fee corresponding to the expenses he has incurred in relation to preparing for the property sale. - back -
What are the typical procedures of a property sale?
All German contracts associated with the purchasing and mortgaging of real estate must be produced and signed at the office of a public notary.
Prior to the meeting with the notary, both the seller and the purchaser must have read the contract so that possible changes can be made at the meeting. The notary is responsible for ensuring that the transfer of the property deed and the payment are made according to the law.
The notary does not in essence provide advice to the purchaser but he is responsible for ensuring that both parties are fully aware of the contents and meaning of the contract.
When all the documents are ready for signing, the notary will read out documents related to the change of ownership to the purchaser. As it is required by law that the purchaser is able to understand and approve the content, it may be necessary to hire a translator unless the notary is satisfied that the purchaser’s command of German is sufficient.
BoligBerlin can recommend a translator who typically charges EUR 300 plus VAT for translation services during the meeting with the notary.
If the apartment for sale is part of an apartment block scheduled for a complete renovation there are very strict regulations governing the amount and timing of payments. The main principle is that payments are due in accordance to the progress of the renovations and the purchaser only pays for the sections of the building which have actually been renovated. The first payment is typically due on commencement of the renovations.
In other situations, it may be common to pay the purchase price into the notary’s client account. The notary will then release the funds when he is assured that the change of title deed has taken place in accordance with the contract.
The funds are generally released to the seller when the title deed is signed over to the purchaser. To prevent the seller from mortgaging or offering the property to another buyer before the registration of the change of ownership, the notary may assist in obtaining a temporary registration. - back -
What percentage downpayment is required?
If a bank is providing a loan, the bank will stipulate the required deposit before a loan is considered. - back -
What is the sales commission and what other costs will there be?
All activities by BoligBerlin are transparent. We are agents for the seller, but we wish in turn to provide the purchaser with the best possible information and advice.
In addition, BoligBerlin can provide contacts to solicitors, banks and architects who can provide independent advice in case of disputes, financial options and other issues related to the property. Despite offering these services, our property prices are never above those offered by our German competitors.
Occasionally, depending on the specific case, the purchaser may pay a fee to the agent. In such cases the fee is up to a maximum of 7.14% including VAT.
The fee to the public notary is usually 1.5% of the purchase price or less if the property is not mortgaged.
Last, but not least, a change of ownership tax of 4.5% of the purchase price is payable to the city of Berlin. - back -
What is ‘proof of finance’ and why is it necessary?
For newly build or fully renovated properties, it is often a requirement that the purchaser can document his ability to provide the necessary funds before the contract can be signed at the office of the public notary.
This is due to the fact that such projects are often financed by a German bank on behalf of the construction company. Such a bank may not want to release funds to the company unless they can document that the apartments have been sold to buyers who have documented their financial ability to complete the purchase.
The document confirming the financial ability of the purchaser is not the same as a bank guarantee, but simply a letter from the bank stating its intention to provide the necessary funds for the purchase. Please contact us if you would like to see an example of such a document. - back -
How much tax do I have to pay?
The amount of tax you will have to pay depends on the country you live in.
The rental income is first declared with the German tax office that has a reciprocal arrangement with many foreign taxation departments. Your own country’s tax office is not automatically notified of you purchase of a property in Germany. It's your own responsibility to declare such ownership on your local tax return. - back -
How much tax do I have to pay when re-selling the property?
The German tax law (§23, item 1) (http://bundesrecht.juris.de/estg/__23.html) states that any gain from selling a property is taxable if the period between buying the property and selling it again is less than ten years.
Exempt from this rule is a property which has either been used exclusively by the owner or if the owner has occupied the property at the time of selling the property, and for the previous two years. In order to be able to document this, it is recommended that the owner is registered with the local authorities as living at the address of the property as the authorities otherwise will assume that the property is not owner-occupied.
In practical terms it means that if you use the apartment for yourself, you will not have to pay tax in Germany of a possible net increase. This of course, also applies if you have had the apartment for ten years before you sell it.
If one is buying an apartment as an investment and it is rented out, tax is also not payable provided the owner has used the apartment and not rented it out for two years prior to selling it.
A potential net increase in value is not just calculated by subtracting the purchase price from the selling price. Legitimate expenses incurred including agents’ fees and other expenses associated with the purchasing and selling of the property can be deducted. In addition, property in Germany is depreciated by 2- 2.5% per year. This depreciation is based on the purchase price (based on the building not the land value), and this means that the purchase price may be reduced by 25% for the purpose of calculating the net increase in value.
Note that it is the tax rule of your home country which determines exactly how the tax rules are applied. - back -
Do I need a German solicitor (lawyer)?
It is not necessary to use a German lawyer; however, it may be to your advantage to use a law firm which has knowledge of German as well as your own country’s regulations. - back -
Can I buy a property with another person?
Yes. There is no problem buying a property with others. The fees are the same when buying the property. If a ‘share’ is sold later, the new buyer will only have to pay change of ownership tax on the corresponding size of the ‘share’ (5% of the price of the ‘share’).
It is recommended that the advice of a solicitor is sought to examine the various options. A simple partnership agreement may be easier than establishing a company which owns the property. Note that any change in ownership needs to be executed by the public notary. - back -
Costs of renting the property - back -
Calculate your monthly expenses
You can download our Expense calculator to work out your likely monthly expenses. Note that the information is only a guide and BoligBerlin is not responsible for its accuracy. Download the Microsoft Excel document by right clicking this link and selecting SAVE AS http://www.broens.com/files/boligberegner.xls
Land tax and monthly contribution to the body corporate / owners’ association
The German land tax is about EUR 135 per year for a two-room apartment and about EUR 200 for a three-room apartment.
The fee to the body corporate or owners’ association (Hausgeld or Wohngeld in German) covers the associations’ expenses including the janitor and maintenance of the property and its installations. Note that an amount for hot water and common antenna is usually included in the fee. In a well kept apartment this fee is around EUR 2.00-3.00 per square metre per month. - back -
About the properties - back -
How big are the apartments?
A listed square metre area may differ from country to country. In Denmark for example the outer measurements are used to calculate the size of the apartment, in other words, the thickness of the walls, the staircase etc are all included.
In Germany only the usable areas inside the apartments are included in its listed square metre area. - back -
What does Altbau and Neubau mean?
In Germany, buildings are classified as Altbau, Plattenbau or Neubau. Neubau is typically newer houses build since the 1980’s. Plattenbau refers to the typical concrete apartment blocks which were build from the late 50’s to the late 70’s. Altbau are thus houses build before the 1950’s.
When we describe a property as being ’Altbau’ on www.boligberlin.com, we generally refer to houses from around the turn of the previous century. We are referring to classical houses with ornate decorations, stucco and with high ceilings. - back -
What is meant by core refurbishment?
A core refurbishment refers to a refurbishment where a property has been stripped to its bare essentials – usually down to its load-bearing elements which are thoroughly examined and repaired. All old installations including plumbing and wiring are replaced and new designs for the individual apartments created.
The property receives a new roof and the façade restored to its former glory. Alcoves or balconies and elevators are often added and the internal common areas renovated with green areas for the benefit of all the inhabitants.
The individual apartments will all have a new bathroom and new floors, either renovated or replaced. Ornate plaster and other decorations are repaired or replaced, but the apartment is otherwise completely renovated and is in principle a brand new apartment.
As a result, a core renovated apartment will not cause any unexpected problems for its owner for many years. - back -
Why are so few finished apartments for sale?
In Germany, one does not have the same safety parameters as in many other countries when it comes to buying an existing property. Building reports, change of ownership insurances etc are unknown concepts in Germany and an existing (“used”) apartment is bought “as is” and the seller is only responsible for problems or hidden damages if it can be proven that he was or should have been aware of these problems at the time of selling the property (cases of gross negligence).
At BoligBerlin, we therefore prefer to sell modernised or core refurbished apartments, as there are a number of safety features build into the purchase. The most important safety measure is that the construction company gives a five year warranty in the case of core renovations or newly constructed buildings.
Many renovation projects are sold “off the plan”, which means one has to wait for a period from buying the property until final occupation. Our goal is however to offer as many fully renovated, modernised or newly constructed properties as possible. - back -
How do I know that the construction or refurbishments are done properly?
BoligBerlin is most often able to assist you in appointing the reputable quality standards firm TÜV to check that the property is being constructed or renovated according to current building standards. Proscriptions from TÜV must be adhered to by the builder. - back -
If I buy an apartment in a refurbishment project, when will my apartment be ready for occupation?
BoligBerlin focuses primarily on inner city renovations which aim to improve the inner city environment. The authorities in Berlin have decided to renovate and modernise the city. To finance this, a sizeable tax rebate is given to German tax residents who can deduct the renovation expenses over a period of ten years. This means that most attempt to buy the apartment before the renovations begin as this allows for the maximum amount of deduction.
These tax breaks do not affect non-resident buyers, but it means that it is difficult to find a newly renovated apartment for sale. One typically has to sign a contract to buy an apartment even before the renovation has begun and it is normal to have to wait six months to a year before the apartment is available for occupation.
You may wonder why not more apartments are being offered for sale by private owners in the attractive areas as is common in other European cities. It is simply due to the regulations that one has to keep an apartment for between 10 and 12 years before selling in order to enjoy the full tax break. Furthermore, the fall of the Wall only occurred about 18 years ago and the property market in Berlin is still a young market. It pays to act now while prices are still low. - back -
What’s up with German kitchens?
A kitchen in Germany is regarded as a piece of furniture rather than a fixture of the house or apartment. It is therefore common that apartments offered for sale on www.boligberlin.com do not include a kitchen.
The seller’s argument is typically that the individual aesthetic of the buyer is so varied. Whatever the argument, the good news is that good quality kitchens including all white goods are available for as little as EUR 3,000. Should a kitchen be included in the sales price, it is clearly stated. - back -
Are the properties wired for cable TV and Internet?
Yes, all renovated or newly constructed properties are wired for cable TV and internet. - back -
Where can I buy furniture?
Berlin has several large furniture warehouses and building markets where you can buy furniture for your new apartment. For example, IKEA has three large stores in Berlin – check out their website. www.ikea.de - back -