Buying a home

Buying a home in Germany involves a notary and an entry in the land register (Grundbuch). The notary records the agreement to transfer ownership; ownership itself passes through agreement and entry in the register. The property transfer tax rate depends on the Land where you buy.

In short

• A contract that undertakes to transfer or acquire land needs notarial recording. Do not treat a private signature as the completed purchase.
• Ownership passes by agreement plus entry in the Grundbuch. Receiving the keys is not that entry.
• Budget for the property transfer tax in your Land, as well as the actual notary, register and any broker costs. Ask how each cost is calculated before you commit.
• Wohngeld for an owner is a different benefit. Some residence titles and some other benefits are excluded.
• Residential-building insurance is not required by statute. BaFin states that a property loan usually requires it. It insures the building, not the contents.

What you need to know

Section 311b of the Civil Code says a contract by which one party undertakes to transfer or acquire ownership of a plot of land needs notarial recording. A contract made without that form becomes valid in its entire content if the conveyance and the entry in the Grundbuch both take place. Until then, do not treat an unsigned or privately signed promise as the completed purchase.

Section 1 of the Notarisation Act governs public recording and custody by the notary. Ask the notary for the transaction’s document requirements and an explanation of the costs.

Section 873 says that transferring ownership of a plot, encumbering it with a right, or transferring or encumbering such a right, requires the agreement of the entitled person and the other party on the legal change, and the entry of that change in the Grundbuch, unless a statute provides otherwise.

Before the entry, the parties are bound by the agreement only in the cases section 873 lists, including where the declarations are notarially recorded. The land register, not the house keys, is the record of ownership this section uses.

A purchase of domestic land is a transaction covered by section 1 of the Real Estate Transfer Tax Act, subject to the Act’s exemptions. Section 11 states a 3.5 percent rate, while Article 105(2a) of the Basic Law gives the Länder power to set the rate. Use the rate applicable where the property lies, not 3.5 percent as a universal bill. The official transfer-tax service lets you select the property’s location for the responsible authority and regional information.

The Bundesnotarkammer’s property-purchase guide explains the notary’s neutral role, the contract and safe completion. Raise questions about the draft, payment conditions and documents before signing. The notary serves both parties impartially; financing and the purchase budget also need their own checks.

Wohngeld for an owner is a different benefit and is described on the Wohngeld page, which also says who is excluded. A credit record is described on the SCHUFA page. Ask your bank for its lending rate.

What to do

1. Arrange for a notary to record the contract. Under section 311b, this is required for the agreement that creates the duty to transfer ownership. Section 873 requires agreement and a Grundbuch entry for the transfer itself.
2. Use the Notarsuche on the Bundesnotarkammer’s portal to find a notary. Ask for the draft, the required documents and a cost explanation, and resolve questions before the appointment. Follow the agreed payment conditions; signing or receiving keys does not by itself make you the registered owner.
3. Open the linked official transfer-tax service and select where the property lies. Confirm the current Land rate, any exemption and the responsible tax office; do not budget from a nationwide 3.5 percent assumption.
4. Read any broker agreement and ask what commission is due and when. Include that alongside tax, notary and register costs in the budget; do not insert a commission percentage from another purchase.

The building is not the contents

Wohngebäudeversicherung covers the building and things fixed to it. BaFin says the law does not require this insurance, but a property loan usually does. The policy sets the insured amount and risks; BaFin gives fire, tap water, storm and hail as examples. Furniture and other movable goods need separate, voluntary contents cover. In an apartment building, the owners’ association usually holds the building policy. Ask your lender whether a policy is required and check the insured amount in the contract.

Common mistakes

• Treating the keys, or a private sale agreement, as the change of owner. Section 873 uses agreement plus the Grundbuch.
• Adding a broker percentage from memory instead of checking the agreement and the transaction’s full costs.
• Assuming an owner can always receive Wohngeld. The Wohngeld page states the exclusions, including some residence titles and some other benefits.
• Treating a contents policy as cover for the building, or assuming every purchase requires building insurance by statute. BaFin states that the statute does not require it and that a property loan usually does.