How to Buy a House in Germany?

How to Buy a House in Germany?

Step-by-Step Guide + Most Affordable Regions in 2025

Buying a house in Germany is not only a smart investment but also a great opportunity for a comfortable life or relocating with your family. Despite rising prices in major cities, there are still many regions in 2025 where property remains reasonably priced.

Top 7 Most Affordable Regions

Region / City	Average Price per m²	Highlights
Saxony (Leipzig, Dresden)	€2,200–2,800	Developed infrastructure, low prices
Thuringia (Erfurt, Jena)	€2,000–2,500	Quiet towns, growing demand
Saxony-Anhalt (Magdeburg)	€1,800–2,200	One of the cheapest regions
Brandenburg (Berlin suburbs)	€2,800–3,200	Great for rental or holiday homes
Mecklenburg-Western Pomerania	€1,700–2,100	Scenic locations near the Baltic Sea
Ruhr Area (Essen, Duisburg)	€2,200–2,700	Former industrial zone
Franconia (Northern Bavaria)	€2,400–3,000	More affordable than Munich or Nuremberg

Note: In small towns, house prices are 30–50% lower than in major cities.

What Documents Do You Need?

For individual foreign buyers:

• Passport

• Proof of funds (in some cases)

• If using a mortgage – proof of income and bank statements

• Power of attorney (if buying through a representative)

Taxes and Costs When Buying a House

Expense	Approximate Rate
Property purchase tax (Grunderwerbsteuer)	3.5%–6.5% (varies by region)
Notary and land registration	~1.5%
Agent’s commission	Up to 3.57% (depending on agreement)
Annual property tax	€300–1,000/year
Utilities	€200–400/month (for a house with land)

❓FAQ – Frequently Asked Questions

Can foreigners buy property in Germany without a residence permit?

Yes. Residency is not required. Foreigners have the same rights as locals to purchase real estate.

Can the house be rented out?

Yes. Renting is legally regulated and taxable.
Make sure to sign a formal rental agreement and submit a tax declaration.

What’s better – old houses or new builds?

• Old buildings – cheaper, but may need renovation and energy upgrades

• New builds – more expensive but energy-efficient and low maintenance

Why is buying a house in Germany a good idea?

• Transparent legal system

• No restrictions for foreign buyers

• Stable market with low risks

• High rental demand in suburbs and small towns

• Low mortgage rates (historically speaking)

✅ How to Buy a House in Germany: Step-by-Step

1. Choose a Region and Property

Depending on your goal:

• To live in

• For rental income

• As a holiday/weekend house

Key factors:

• Transport links

• Proximity to schools, shops, hospitals

• Condition of the house and land

2. Preliminary Check (Due Diligence)

• Any encumbrances? (e.g., mortgage, easements)

• Technical condition

• Year built, heating, insulation (important for energy efficiency)

3. Financing

Options:

• 100% cash (common for foreign buyers)

• Mortgage (possible for non-residents with income and at least 30% equity)

4. Sign the Contract with a Notary

• Notarization is mandatory

• Notary registers the transaction in the land registry

5. Pay Taxes & Finalize Registration

• Grunderwerbsteuer (property tax): 3.5–6.5%

• Registration: approx. 1.5% of property price