THE INTERNATIONAL BUYER‘S GUIDE FOR GERMANY
WELCOME TO GERMANY’S MOST STUNNING CITIES BERLIN & FRANKFURT Fascinating, diverse, and vibrant, with the beneficiaries of long-term population growth – this is the characterization of Berlin and Frankfurt. Germany’s capital – Berlin – and the country’s “secret capital” – Frankfurt – are on the investment agenda of international buyers from all over the world. On the one hand, both cities are marked by
an increasing demand for real estate and a corresponding shortage of supply, as more and more people are attracted by the cities’ extensive cultural landscape, diversified job market and great quality of life. On the other hand, both real estate markets are still much more affordable than other metropolises are – and continue to offer strong value.
WHAT MAKES THESE CITIES ATTRACTIVE FOR INVESTORS? BERLIN
FRANKFURT
According to Investitionsbank Berlin, the city has grown by 144,000 inhabitants over the past three years alone, and the Senate Department for Urban Development and the Environment, expects that the number of Berliners will exceed 3.8 million by 2030.
Frankfurt has consistently ranked among the top three cities for international companies since 1990. It is a major international financial center with the European Central Bank (ECB), Deutsche Börse, and a huge number of multinational companies headquartered in Frankfurt.
Berlin is traditionally a city of tenants with a low ownership rate. Landlords benefit from continuously increasing rents, especially in popular districts like Berlin-Mitte: Since 2008, the median rent has risen by 70%!
The “active market vacancy rate” in the Main metropolis at the close of 2014 was a mere 0.6 percent, having fallen continually since 2006. Meanwhile, rents are increasing: Since 2006, median rents increased by almost 40%.
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WE KNOW WHAT INTERNATIONAL CLIENTS NEED WHEN PURCHASING PROPERTY IN GERMANY
70% of our clients come from abroad – Over the last 25 years we have set up our network and service to fulfill every request these clients may have
OUR PROPERTIES
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8 STEPS TO BUYING AN APARTMENT WITH ZABEL
1. Which apartment? One of ZABEL’s property consultants will help find a suitable apartment from our property portfolio. You define your investment criteria:
Location Size Purpose of the investment (owner occupier or investor) Budget
You will be able to do this in one of the following languages: English, German, French, Spanish, Italian, Chinese, Vietnamese, Polish, Turkish, Greek, Russian, Lithuanian, Dutch, Arabic, Czech.
purchase without needing to return or make extra appointments abroad.
3. Ready to commit to an apartment? Upon finding the right apartment, you will fill out an “Arrangement for a purchase contract”. This is a kind of “reservation”, which becomes binding upon paying a 1% reservation fee. The reservation fee is deducted from the broker’s commission post closure of the purchase contract or refunded post purchase if no broker‘s fee is applicable.
4. Mandating your lawyer and receiving the purchase contract 2. Coming to Germany? We pick you up from the airport in our company van and make sure you feel welcome in our beautiful and exciting city. From your hotel booking, to restaurant and concert tickets – we can take care of this for you. After meeting with your property consultant and discussing the market, we visit the selected properties to help you with your choice. We introduce you to a lawyer and tax consultant as well as taking you to a financial institution to open a bank account and discuss a mortgage. Taking care of these things allows you to return home and be able to close the
If it has not already been taken care of during a trip to Germany, the lawyer of your choice will need to be mandated. This can also be done after a phone call with one of our partner lawyers. The purchase contract will be sent to the lawyer and they will discuss it with you explaining your requirements and risks. A power of attorney will need to be signed (either at a notary in Germany or the German consulate in your home country). Our lawyers speak the following languages: German, English, Spanish, Italian, French, Russian, Chinese and Greek.
A 5. Notarization In Germany, a public notary must certify the purchase contract. The buyer (unless represented by the lawyer) and the seller both sign in the presence of a notary. The contract is read aloud. If you are not working with a lawyer but do not speak German, some notaries can read aloud in English, however the German contract is legally binding.
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payments look like this:
6. Post purchase payments Upon signing the purchase contract, you will receive invoices from different parties related to the acquisition costs. These include: land acquisition tax, notary and land registration fees, legal fees as well as the broker’s fee. These are payable immediately post purchase. If you are using a lawyer, he or she can set up an escrow account for you to transfer this amount and they will make the payments for you.
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30% Upon breaking ground 28 % After the preliminary building frame construction is completed (including carpetry work) 12,6% After the completion of roofs and gutters and after the windows are installed 10,5% After the completion of heating installation, sanitary installation, electrical installation, interior plastering 4,2% After completion of façade works and screed 11,2% After completion of the pipe works in the sanitation areas and step-by-step handover of the property 3,5% After total completion (including outdoor facilities)
7. Payments If you are buying in a new development, according to the German law, you will receive up to seven invoices from the developer based on construction status. The payments are stipulated in the final purchase contract.
8. Competition The handover takes place and you are free to rent out your property or move in!
AS THE MARKET LEADER FOR PREMIUM PROPERTY TO INTERNATIONAL BUYERS, YOU ARE IN SAFE HANDS AT ZABEL Our property consultants speak over 15 languages, meaning we can connect you with someone who really “understands” you and your property needs. We guide you through each step: from the first phone call of interest, to the handover of your property and well down the road once you wish to sell.
FREQUENTLY ASKED QUESTIONS Do I have to speak German if I buy property in Germany?
Can I get a mortgage as an international buyer?
No, you do not need to speak German. Our property consultants speak over 15 different languages and will be able to answer all of your questions. To do the due diligence on the German purchase contract, we recommend you use a lawyer, who can represent you throughout the purchase. He or she will have you sign a power of attorney to act on your behalf. They will also be your registered address for all postage until the handover of the property.
Yes, you can. We have connections to many financial institutions that are able to finance the purchase price for up to 60%, depending on the property and the country of heritage. We guide you through the red-tape in order to take advantage of the historically low interest rates.
What if the project is delayed? Delays are stipulated in most purchase contracts and compensation will be defined. If not, the German law applies and compensation is required.
What are the monthly fees? There are monthly fees based on the m² of the apartment. On average this is around 3-5 Euro per m². This includes maintenance costs, winter service, garbage disposal, house insurance, heating, warm and cold water as well as any other service included in the building (For example: Concierge). If the apartment is rented out, approximately 15% of these costs cannot be allocated to the tenant renting.
Can I rent out my property? We can take care of finding a tenant for your property, as well as taking care of the property management. We provide a full service package for our international clients.
Are there any restrictions for international / non-domestic buyers? No, there are not.
How do I sell my property? Just like the purchase, we can take care of putting the property back on the market and selling it to the right buyer. We will discuss the market with you and your desired price in order to sell within an appropriate timeframe.
I am looking for yield. What can I expect in Berlin or Frankfurt? The rental yield in Berlin highly depends on the kind of property, its location and the occupancy rate. Most of our properties in Berlin can gain an average of 3 – 3,5% yield. Frankfurt lies slightly higher with around 4%.
What costs come on top of the purchase price? In Berlin, you can expect the following acquisition costs: Notary and land registration fee 1,5% of the purchase price. Legal representation (if necessary) 1% of the purchase price Stamp duty (Land acquisition tax) 6% of the purchase price. Broker’s fee 5,95% of the purchase price. In Frankfurt, no brokerage fee applies.
Can I have my apartment furnished? We offer this service for our clients. We can do partial furnishing to prepare for a tenant or connect you with an interior designer to have the entire apartment the way you wish it to be!
Do I have to come to Germany to make the purchase? Although we recommend you come to our beautiful country, it is not necessary for the purchase. You can sign the power of attorney for your lawyer at a German consulate abroad and they can be your point of contact in Germany.
What kind of protection do I have when buying property off plan? The MABV regulation (The real estate and developers regulation) protects consumers when buying in a new development. This regulation only allows developers to request installments upon completion of the actual work. You pay once the work has been completed! The exception is the first installment of 30%, payable on breaking ground.
What do I need to consider when it comes to tax in Germany? Before purchasing, we advise you to discuss taxation with your legal representative. Income tax: If you rent out your property in Germany, you will need to consider “income tax” as the rent is considered “income”. Income tax (for a person) ranges between 15% - 42% and is progressive. If a corporation owns the property, a tax rate of 15% is applied. You will therefore need to do an annual tax return. (This costs on average 300 Euros per year). Capital gain tax: If the property is held for more than 10 years, the client (if purchased by a person and not a corporation) is exempt from paying capital gain tax. Property tax: This is due on a quarterly basis (or can be paid fully in advance at the beginning of each year) and ranges depending on the property, the location and size. It is a very low amount and can be included in the rent for up to 100%. Inheritance tax may also apply and should be discussed in detail with your legal representative.
Can I open a bank account in Germany? Do I need to do so if I want to rent out my apartment? If you wish to rent our your property in Germany, you will need a bank account. We can take you to one of our network financial institutions in order to set up a bank account.
If I buy property in Germany, can I get a residency permit? Buying an apartment in Germany, does not give you a residency permit.
How do I transfer money to Germany? We work with currency exchange companies who can assist you with this. We would also advise that you discuss this with our legal representative.
Do I have to be a resident to buy property in Germany? No you do not.
Do I need a lawyer to make the purchase? If you do not speak or understand German and do not have an address in Germany, we recommend you use a lawyer. We have a large network of lawyers who speak German, English, Spanish, Italian, French, Russian, Chinese and Greek.
Can I buy property under the name of a company? Yes, you can. In some cases, this is the better option for buyers. We suggest you discuss this in detail with your legal representative. It may be the better option for you.
WHY ZABEL?
We are the go-to company if you are an international buyer. No other company in Germany has a set-up like we do when it comes to offering the service an international buyer needs. We have been on the market for over 25 years.
We have an extensive portfolio of premium properties in the best locations in Berlin and Frankfurt.
Our sales volume in 2015 was 118 million Euros.
OUR INTERNATIONAL TEAM
Jennifer Eisenecker
German, English, Chinese
Nadine Mirke
German, English
Jonathan Dolling English
Alessandra Masini
Italian, German, English, Spanish
Evangelia Tsala
Greek, English, French
Javier Sayes Gomez
Spanish, German, English
Gรถksen Trompeter German, English
Julian Mutzhas German, English
Serkan Gรถcmen Turkish, English
OUR INTERNATIONAL TEAM
Karina Schumacher
German, English, Russian, Lithuanian
Santo Esposito
German, Italian, English
Katja Sowa
German, English
René Lachmann German, English
Stefan Bertok
German, English
Thu Trang Tran
German, Vietnamese, English, French, Spanish
Nadège Hartmann
French, English, German, Spanish, Chinese
Ljubov Shalshenko
German, English, Russian
Liv Baggen
Dutch, English, German
CONTACT US
HEAD OFFICE
FINEST HOMES SHOP
Unter den Linden 14 10117 Berlin
MarkgrafenstraĂ&#x;e 37 10117 Berlin
+49 (0)30 886600-0
+49 (0)30 886600-500
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