Buying property in Australia as non-resident. What you need to know
Whether you’re considering moving to Australia and hope to buy a home or are interested in investing in the Australian property market while remaining...
Germany – a nation where lush forests, crystal clear rivers and mountains intersect with historical townships and modern metropolises. From chic apartments in Berlin to sleek, modern highrise homes in Frankfurt or traditional cottages in quaint villages throughout, Germany also has no shortage of housing options.
If a move to Germany is something you’re considering and you’re unsure where you stand when it comes to buying property as an Australian, this guide will walk you through what to expect. You could find yourself toasting a beer over your new home sooner than expected, Prost!
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Note: This article is purely for general information purposes and is not to be taken as financial advice. We recommend that you obtain independent financial advice before making any form of decision. |
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Yes, currently there are no listed restrictions on Australians and other foreigners wishing to buy property in Germany. This is the case regardless of whether you're from an EU or non-EU country.
Some countries have what is referred to as Reciprocity or a Reciprocity Agreement for buying property. Aimed at making these exchanges mutually beneficial for citizens of both nations, these agreements typically outline any protections and conditions that apply should they purchase real estate in the other country.
In the case of Australia and Germany, no formal reciprocity agreement exists in terms of property. However, there is an agreement related to taxation that makes provisions to avoid double taxation for residents/citizens of both nations on income and capital gains from property.¹
With one of the lowest homeownership rates in Western Europe at just under 50%, renting is very common in Germany. While data shows a steady increase in the housing market in the ten years leading up to 2022, more recently this has been in decline.²
This is largely attributed to record-high interest rates which have seen locals preferring to remain renting rather than buy. While this means lesser market competition in some regions currently, this is predicted to change.
With so many great cities and different regions to choose from, knowing where to start your German property hunt can be a challenge. To help you get started, we’ve gathered details of the average property prices per square metre in various locations to compare.
As more than half of all German households live in apartments, we’ve focused on these rather than houses for this article.²
City | Average price per square metre in EUR³ |
---|---|
Munich | €7821 per sqm |
Frankfurt am Main | €5437 per sqm |
Hamburg | €5157 per sqm |
Stuttgart | €4477 per sqm |
Berlin | €4896 per sqm |
Cologne | €4547 per sqm |
Dusseldorf | €4175 per sqm |
As seen on 17 July 2024
So, using the above, we can estimate that for a smaller 50smq apartment for a single or couple in Berlin for instance, you could expect to spend somewhere in the vicinity of EUR€244,800.
Known as mobilienhändler or makler, German property agents are not required to be licensed to operate, but are required to hold a specific permit under the Trade Regulations Act. To obtain this, they must meet strict criteria related to qualifications, personal, and financial conduct.⁴
You can find a local agent by word of mouth, researching online or by looking for the name of the responsible agent or agency on an online listing. If any time you have concerns over the conduct of an agency or agent, you can seek support via the European Consumer Centre Germany.
A quick and easy way to browse sale listings and prices throughout Germany, dedicated real estate websites are the ideal place to begin your property hunt.
Popular sites for searching out property listings throughout Germany include:
Alternatively, you may like to visit an agency's website in your preferred city to find local listings.
Despite its considerably smaller size when compared with Australia, as an older and much more densely populated country, Germany offers a diverse range of properties and lifestyles depending on where you buy.
We recommend considering the following to determine which property will be best suited to your needs:
Yes, many banks in Germany will approve home loans for foreigners, however, to do so, you usually need a valid residence permit or visa, proof of income or a job. Other approval criteria specific to the bank you apply with will also need to be met – this is quite similar to securing a mortgage in Australia.
Additionally, it should be noted, as a non-EU resident, you may be limited in how much you can borrow when compared to a German citizen, though this can vary based on the lender in question and your visa status.
As an Australian buying property in Germany, a mixture of documents is usually required to complete the purchase. To be supplied to the seller and the notary, this typically will include but is not always limited to⁵:
While not always the case, you may be asked to translate some of your Australian documentation into German. If this is requested, we suggest enquiring with the applicable party about an approved translation service that you can use.
Considered some of the highest property transaction costs in Europe, the fees and taxes associated with buying property in Germany generally add up to around 10% or more of the property price.
These include⁶:
Interestingly, while agent commission fees used to be covered by the seller, new legislation now sees commission costs split equally between the seller and buyer.⁷
Sharing some similarities with Australia, buying property in Germany also comes with some key differences, notably, the absence of a solicitor or conveyancer, instead, you’ll need to engage a notary.
Outlined below is the basic steps, including where a notary is required, to finalise a property purchase as an Australian buying in Germany.⁸
Despite a robust and well-regulated real estate industry, there are still some watchpoints to be aware of as an Australian buying property in Germany. To avoid falling victim to any property scams we recommend that you:
It should be noted that while you are permitted to buy property in Germany as an Australian, doing so does not give you citizenship, residency or permission to live and work in Germany long-term. You will need to pursue an appropriate visa for your circumstances to remain in Germany indefinitely.
Additionally, while English as a second language is increasingly common for German citizens, if you opt to live outside of major cities or in regional areas, you may still find communicating in English a challenge. As such, actively learning German is encouraged, appreciated by locals and will help you to more fully integrate into your new home.
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This article is purely for general information purposes and is not to be taken as financial advice. We recommend that you obtain independent financial advice before making any form of decision.
Sources:
Sources checked on: 17 July 2024
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