Travel to Germany

History has not been in favour of German real estate investment, as the fallout of reunification was sluggish for the property market for a long period of time. However, the German property market is back with a vengeance and is gathering momentum on a daily basis! It took the Soccer World Cup of 2006 to revive the fortunes of the laidback property scenario within Germany.

Germany a late entrant in the real estate business is destined for higher plateaux. Though the country is considered as much more technologically advanced than most of its European counterparts, it is the housing segment that requires cosmetic work to bring it back to the forefront of the world's property stage.

Salient Features of Germany from Investment Point-of-View

Any prospective German real estate investor must ponder over the following features of the country before making up his mind -

Legal Position of foreigners owning property in Germany

The German government has not imposed harsher limits on the foreign ownership of real estate in the country. Non-Germans can also buy, own and sell an unrestricted quantity of land and homes. They can also hold property as landlords, and even develop property after satisfying certain simple rules and regulations. Buyers from EU countries have an added advantage of access to residency and labour rights as set out in EU law. The Non-EU investors must consult the local embassy regarding their rights in Germany.

A legal professional is required to carry out all the paper work in Germany for the real estate investors. This is because most of the administrative work requires to be executed in German, and despite your best knowledge of the language, you'll be ill at ease while handling German authorities. The German Banks are also offering low interest rates on mortgages. Most banks will lend up to 70 per cent of the purchase price, though you will have to fulfill certain conditions. The maximum mortgage terms are 30 years on a rate of fixed interest. See our page on getting a mortgage in Germany

Any property purchase in Germany is susceptible to Property Tax as per different rules of the different regions. However, the rates are not too prohibitive. Even the rental income is chargeable under Income Tax. It's better that you hire a local solicitor to guide you through the possible taxes regarding your property in Germany. In addition to offering property for sale in different locations in Germany we also have at your disposal a list of other useful tools to help in your decision making when considering buying a property in Germany :

- Buyers Guide to Germany - A useful article on the buying process when buying a property in Germany

- German Country Guide - A detailed guide to Germany including information on health, economy, business, travel, things to do, excursions and much more

- Locations in Germany - A current list of locations that have property for sale in Germany

- Airports in Germany - A guide to the main airports in Germany, where they are and how to get there

- Attractions in Germany - A list of popular tourist attractions in Germany

- Estate Agents in Germany - a directory of estate agents in Germany and a list of real estate agents selling property in Germany

- News Articles on Germany - A useful resource for learning about the country, what's happening and useful information on Germany

- German Shopping - A directory of useful resources to assist in your purchase or travel to Bulgaria including; Flights, Accommodations, Car Hire, Mortgages in Germany , Holidays, Lawyers and much more.

- Useful Resources - a list of useful resources that you might find of general use.

At the heart of the EU, Germany is a federal republic comprising sixteen 'Bundeslander' (states). Re-united in 1990 after forty five years of separation into the Soviet controlled East Germany and West Germany, the country has borders with France, Luxembourg, Austria, Belgium, Czech Republic, Denmark, the Netherlands, Switzerland and Poland.

It also has a North Sea coastline to the north west, and Baltic Sea coastlines to the north east.

To the south are the Bavarian Alps. Almost a third of the country comprises forest and woodland.

Germany is a major industrial nation with major interests in car manufacturing and engineering as well as in service industries such as insurance and banking. It is the world's largest exporter and the second largest importer. It is also the UK's second largest export market, after the US.

The Foreign Office reports that more than a decade after reunification, there are still differences in living standards between the eastern and western Bundeslander with unemployment still a key issue in the east.

According to the Foreign Office there is a general threat from terrorism in Germany. 'Such attacks could be indiscriminate, including in public places frequented by expatriates and foreign travellers'. However, 'most visits to Germany are trouble free', it said.

UK citizens do not require a visa to enter Germany. However, those intending to stay three months or longer must register with the German authorities (the Einwohnermeldeamt) within seven days of arrival.

Those staying in Germany for a short visit are not normally required to register. Hotels are legally obliged to register guests and this information is passed automatically to Einwohnermeldeamt. There is no longer a requirement for EU Citizens to apply for a residence permit.

British investors are free to purchase property in Germany without restriction.

German people have a long tradition of renting their homes while the tax system mitigates against property speculation and buying costs are relatively high - around six to eight per cent of the purchase price plus an agent's commission of approximately six per cent plus VAT. The upshot is that the property market is relatively slow meaning that investing in Germany should be for longer term capital growth.

In the interim, buy to let investors looking for rental returns can benefit by German property prices not having moved ahead at the same pace as EU partners and by strong rental demand from long term tenants.

Rental yields are said to be as high as ten per cent in major cities although this is often in poorer areas where property values are expecting to fall - more realistic expectations in nicer areas would be between four and six per cent.

With many Germans moving from the poorer east to the more affluent west, there is a housing surplus in the east - much is in a poor state and earmarked for demolition or renovation. Germany also plans a major home building programme over the next few years, so shortages are quite unlikely.

When purchasing property there is usually no pre-completion contract. The terms and conditions of the final contract - which must be signed before a notary (who acts for both sides) are for agreement between the parties. Buyers need to employ their own lawyer, and should have contracts translated if necessary, they are also recommended also to employ a tax accountant.

Buyers must also satisfy themselves on the condition of the property they are purchasing. Mortgage financing is available, for up to seventy per cent of the purchase price. Long term fixed rate terms at relatively low rates of interest are on offer.

Capital gains tax applies when properties are held for less than ten years - although the tax may apply to all properties from 2008.