Must I come to Germany for the purchase?
In recent years, Germany has become a preferred and sought-after destination for real estate investments for many Israelis who have
Must I come to Germany for the purchase?
In recent years, Germany has become a preferred and sought-after destination for real estate investments for many Israelis who have recognized the potential inherent in the combination of relatively low house prices, ongoing economic prosperity that may raise the value of the property and the high standard of living in the country, which enables property-owners to charge relatively high rents. These advantages are particularly evident in Germany’s major cities, most notably Berlin. If you are also considering purchasing real estate in Germany, it is advisable to be familiar with the unique characteristics of Germany’s housing market. This article will briefly review the expenses associated with purchasing an apartment in Germany, and focuses on ways to save one of the central expenses – traveling abroad for purchase.
Expenses involved in purchasing a property in Germany
Buying an apartment in Germany involves various expenses that are unknown in Israel. The expenses that you will be required to bear if you wish to purchase real estate in Germany include:
- Notary Payment – The notary is an independent and separate entity that is duty bound to both seller and buyer in equal parts. He is entitled to a payment totaling 1.5% of the value of the transaction.
- Real estate agent commissions – If you have chosen to use an agent, you should know that the commissions in Germany are not very cheap and constitute about 5.9% of the value of the transaction.
- Mandatory tax – In Germany you will be required to pay a tax of 6% of the property price.
- Rental income tax – The profits earned as a result of property rental are taxed in Germany at a rate of 25%. These revenues will also be taxed in Israel at the rate prescribed by law.
What other expenses may be incurred when purchasing an apartment?
In addition to all of the above, there are additional costs that you may incur when buying an apartment. These include:
- Mailing documents needed for the contract – as annoying as this may seem, and rightly so, buying real estate involves quite a bit of cumbersome bureaucracy. Sending documents by mail can constitute a significant part of it. However, you may find that mailing documents is a convenient and inexpensive alternative to traveling to Germany in order to sign the real estate purchase contract.
- Payment of fees of various types – German culture is characterized by order and efficiency. Therefore, payment of many and varied fees related to the purchase of a property is a natural part of the purchase process. The advantage of the orderly manner in which everything is performed is that thanks to the official oversight of the entire process, your rights as purchasers are also more protected and you can make sure the value of the property is higher, for example, by ordering an engineering report about the property’s condition.
- Payment for an engineering report about the condition of the property – before you purchase a property, you want to learn about its condition in many aspects. The fee for this type of report may even reach two thousand euros.
- Traveling overseas to sign the contract – In addition to the cost of airfare and hotel accommodations, such a trip can also cost you time and money due to loss of workdays.
How to Avoid Traveling Abroad for the Purchase
If you feel that traveling to Germany is an inconvenience, you can avoid it and save the associated costs by signing the agreement in Israel, at the consulate. To ensure that everything goes smoothly, you can also hire an Israeli lawyer who specializes in this, and benefit from his/her professional guidance throughout.
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