Buying or building a house in Germany: what you need to knowIf you are thinking of buying or building a house in Germany, you might be tempted by the low interest rates, the stable economy, and the high quality of life. However, before you take the plunge, you should be aware of some of the pitfalls that can make your dream home a nightmare.
Here are some of the most common challenges and risks that you might face when buying or building a house in Germany:
- High costs and taxes: Buying or building a house in Germany is not cheap. According to the Federal Statistical Office, the average price of a new detached house in Germany was 3,000 euros per square meter in 2020, which is 40% higher than in 2010. In addition, you have to pay various taxes and fees, such as the property transfer tax (3.5% to 6.5% of the purchase price, depending on the state), the notary fee (1.5% to 2%), the land registry fee (0.5%), and the real estate agent commission (3% to 7%, plus VAT). These can add up to 10% to 15% of the purchase price, which you have to pay upfront.
- Legal and bureaucratic hurdles: Buying or building a house in Germany involves a lot of paperwork and regulations. You need to have a valid residence permit, a bank account, a credit rating, and a proof of income. You also need to sign a legally binding contract with the seller or the builder, which is usually written in German and contains many clauses and conditions. You should always consult a lawyer before signing anything, as you might not be able to back out of the deal or claim compensation if something goes wrong.
- Limited supply and high demand: Finding a suitable house in Germany can be challenging, especially in urban areas where the demand exceeds the supply. According to the Federal Institute for Research on Building, Urban Affairs and Spatial Development, there was a shortage of 1.2 million housing units in Germany in 2019, and the gap is expected to widen in the future. This means that you might have to compete with other buyers, settle for a smaller or older house, or move to a less desirable location.
- Environmental and structural issues: Buying or building a house in Germany also comes with some risks related to the environment and the structure of the house. For example, you might have to deal with soil contamination, flooding, landslides, earthquakes, or noise pollution. You might also have to deal with defects, damages, or hidden costs in the construction or renovation of the house. You should always conduct a thorough inspection of the house and the land before buying or building, and hire a qualified engineer or architect to oversee the project.
- Cultural and social differences: Buying or building a house in Germany also means adapting to a different culture and society. You might have to deal with different norms, values, and expectations regarding your neighbors, your community, and your lifestyle. You might also have to learn the language, the laws, and the customs of the country. You should always respect the local rules and regulations, and try to integrate and communicate with the people around you.Buying or building a house in Germany can be a rewarding and fulfilling experience, but it also requires a lot of planning, preparation, and patience. You should always do your research, seek professional advice, and weigh the pros and cons before making any decisions. Remember that a house is not just a property, but a home.
If you are still interested in buying or building a house in Germany but maybe need some help - please check out our guides here: