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Germany Property Transaction: Basic Process Outline.
Germany has strong and well-established Property Rights. A Property Purchase gives automatic Rights to the Land on which it is built in part or in full. All Property Transactions are recorded in the Land Registry or the “Grundbuch”. Each District holds a Copy of the Grundbuch in its local Area.
When purchasing an Apartment only a part of the underlying Land is allotted to the purchasing party. However, the use of that portion Land is not directly accessible since all owning Parties in that Building hold a part of that Land.
When purchasing a House or Building, the whole underlying Land becomes available to the Owner. The Property Purchase is taxed by the Grundsteuer(Yearly) and Grunderwerbsteuer(One Time at Purchase). On the following Page the current Grunderwerbsteuer Percentage per Bundesland can be seen. Any Property Transaction is only possible through a registered Notary in Germany. An Appointment needs to be set to record the Transaction upon which the Notary acquires the Details of both Parties and the Object to be transacted by reading the Grundbuch. If the Object has any open Finance Deals with a Bank or Financial Institution or any third Party recorded in the Grundbuch, then that Party is also contacted by the Notary. The Notary is responsible for following the Process through to completion once the Parties have signed.
Both Parties are expected to respond to Letters and Requests by the Notary. The Notary Costs are normally borne by the Purchaser but this is open to agreement between the transacting Parties. The remaining Costs are laid out for respective Parties by the Notary as per the Property law. If any new Financing deal is involved then the requisite financing Body is also contacted and Documents are procured and recorded on the Transaction by the Notary.
Apart from this respective Parties can form any special conditions with the help of Notary or in a separate personal Agreement. However, Notarized Agreement is always advised and not just personal Agreements. The Notary will see to it that each Party - Buyer, Seller and any Third Parties receive their nominal Shares of Money Sums as recorded on the Transaction. Any Delays in the Money Transfer are calculated with pre-decided Interest Rates.
Apart from this respective Parties will receive separate Letters from respective District Authorities to pay the various required administrative fees. Once all Fees have been paid and all Money Transfers have taken place, the Notary will close the Transactional Process and request the Land Registry to update the Grundbuch with its final Status as should be post transaction. And with that the Transaction is complete.
A normal Transaction Process from Appointment Date to completion can be approximately 2 Months but can also take longer depending on Situation.
This is a basic Outline of Property Transaction. in the next Article we shall update about further Details about Property Sale, Purchase, Sharing and Renting etc.
Germany has strong and well-established Property Rights. A Property Purchase gives automatic Rights to the Land on which it is built in part or in full. All Property Transactions are recorded in the Land Registry or the “Grundbuch”. Each District holds a Copy of the Grundbuch in its local Area.
When purchasing an Apartment only a part of the underlying Land is allotted to the purchasing party. However, the use of that portion Land is not directly accessible since all owning Parties in that Building hold a part of that Land.
When purchasing a House or Building, the whole underlying Land becomes available to the Owner. The Property Purchase is taxed by the Grundsteuer(Yearly) and Grunderwerbsteuer(One Time at Purchase). On the following Page the current Grunderwerbsteuer Percentage per Bundesland can be seen. Any Property Transaction is only possible through a registered Notary in Germany. An Appointment needs to be set to record the Transaction upon which the Notary acquires the Details of both Parties and the Object to be transacted by reading the Grundbuch. If the Object has any open Finance Deals with a Bank or Financial Institution or any third Party recorded in the Grundbuch, then that Party is also contacted by the Notary. The Notary is responsible for following the Process through to completion once the Parties have signed.
Both Parties are expected to respond to Letters and Requests by the Notary. The Notary Costs are normally borne by the Purchaser but this is open to agreement between the transacting Parties. The remaining Costs are laid out for respective Parties by the Notary as per the Property law. If any new Financing deal is involved then the requisite financing Body is also contacted and Documents are procured and recorded on the Transaction by the Notary.
Apart from this respective Parties can form any special conditions with the help of Notary or in a separate personal Agreement. However, Notarized Agreement is always advised and not just personal Agreements. The Notary will see to it that each Party - Buyer, Seller and any Third Parties receive their nominal Shares of Money Sums as recorded on the Transaction. Any Delays in the Money Transfer are calculated with pre-decided Interest Rates.
Apart from this respective Parties will receive separate Letters from respective District Authorities to pay the various required administrative fees. Once all Fees have been paid and all Money Transfers have taken place, the Notary will close the Transactional Process and request the Land Registry to update the Grundbuch with its final Status as should be post transaction. And with that the Transaction is complete.
A normal Transaction Process from Appointment Date to completion can be approximately 2 Months but can also take longer depending on Situation.
This is a basic Outline of Property Transaction. in the next Article we shall update about further Details about Property Sale, Purchase, Sharing and Renting etc.
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