FAQ

Buying real estate in Germany does not give foreigners the right of permanent residence in Germany, but owning real estate is a strong argument in the consideration of the application from the authorities, as it proves the financial independence of those wishing to obtain a permanent residence permit.

While previously in order to establish a company in Germany and obtain a residence permit a businessman from Russia was required to invest at least 250,000 euros and create at least five jobs, since August 1 this rule was abolished

The Blue Card is a new version of the residence permit for citizens of third countries (non-EU) coming for the purpose of employment in the European Union. This innovation is designed to increase the attractiveness of the eurozone countries for highly skilled professionals, which are increasingly in short supply. Germany, including Bavaria, one of Western Europe’s most economically powerful regions, is also interested in the influx.

Amendments to the migration legislation of the European Union have recently come into force in Germany – since August 1, 2012, after their approval by the German Bundestag. Not much time has passed. It is too early to judge how the new rule is realized in practice, what decisions are made by the German migration services – the departments for foreigners or consular offices of Germany in Russia, and whether they have received the corresponding instructions.

Requirements for those who want to take advantage of the innovation and get a blue card. The main thing is to have high qualifications. It must be confirmed by a diploma of higher education. It is also possible without a diploma. But then you will need to document the required qualifications on the basis of the results of the previous five-year period. In addition to this, you will have to prove that you have received a total gross income (before tax) of at least 44,800 euros within a year at your future place of work in Germany.

To begin with find a job. Make an agreement with your employer that he will hire you. It is best to have an employment contract already signed.

If the contract is signed for a period of 33 months or more, the blue card holder receives an indefinite right of residence in Germany. If he can show the knowledge of German at level B1 (understand the basic elements of speech necessary in everyday life and household situations, be able to express his thoughts simply and coherently), then the residence permit can be obtained with a term of employment contract already from 21 months.

Other requirements may be imposed when you visit the consular section of the embassy. You will need to submit documents confirming that you have a place to live. For example, the contract on the lease of an apartment in Germany. Especially if you are married and it is a question of your spouse and children moving in with you, which is also possible. For the first time you need, of course, insurance, a sufficient amount of livelihood.

Armed with all the documents, go to a meeting with the consular officials of the Federal Republic of Germany in Russia. The main thing – I repeat – find a job in advance, and be prepared to confirm it with documents.

I recommend everyone who wants to go to the site www.make-it-in-germany.com/en/home/. There is a lot of useful information, you can even analyze your prospects online.

Germany, including Bavaria, has a particular need for engineers, IT specialists, natural scientists, mathematicians and doctors. The “entry threshold” for those who want to find a job here is specially lowered. It is enough to have a minimum pre-tax income of 35,000 euros per year. With an annual income of 35,000 euros will have to pay about 25% tax. So I don’t rule out that for a similar position in Moscow you can earn a little more at the expense of more liberal taxation. Although, understandably, there are other aspects. Some people like to live and work in Western Europe. In Bavaria, for example. This land of Germany is perhaps one of the most interesting and attractive in all of Western Europe.

If you are employed in Germany or do business there, it is strictly necessary to comply with the established procedures for relations with the tax authorities. Tax evasion is a serious offence. If you are an entrepreneur and intend to invest in Germany, the criteria for checking the legitimacy of the origin of the money are no less stringent. This region is very attractive both for life and for business. Especially since there are support opportunities. So, feel free to contact us and we will advise you!

The housing costs (Hausgeld or Wohngeld) in Germany are made up of the following components: utilities (Nebenkosten), house management services (Hausverwaltung) and the community insurance fund (Instandhaltungsrucklage). The housing costs are paid to the housing cooperative, which then distributes them.

1) The utility bills (cold and hot water, heating, gas, insurance, etc.) are paid according to a rate determined every year. At the end of the year there is a recalculation of utilities actually used according to meter readings. If the meter readings show that you used more utilities, you must pay the difference. If less was used than what was paid for, the surplus is returned. And new rates are set for the following year in accordance with the volume of consumption in the previous year.

For this reason, it does not really matter how much you pay when you buy a house, because at the end of the year everyone in Germany will only pay what they have actually spent. For average consumption the cost of utilities is about 2 – 4 euros per m2.

2) House management services. Every house in Germany has its own house management company. These are private organizations that are responsible for keeping the house clean and tidy, providing the house with utilities and ensuring that all residents pay for them on time, as well as minor and major repairs to the building and common areas, and so on. The fees for the building management service range from an average of 20 to 40 euros, depending on the building and the scope of the service.

3) Community treasury. This is used to accumulate money for minor or major repairs of the building and public areas. At the annual meeting of the owners and the house management, decisions are made on the future activities in the house (repairs, painting the facade, installing an elevator, creating a playground, etc.), as well as on the amount of funds to be contributed to the community fund. The decision is made by a majority vote. After the decision has been made, every apartment owner in the building contributes to the treasury on a monthly basis, which can be used for the intended purpose in a number of years. The amount of the contribution depends on the scope and cost of the proposed works and ranges on average from 20 to 40 euros. In buildings awaiting renovation, this amount can be higher. When you buy an apartment, the new owner automatically becomes the indirect owner of a portion of the money already paid into the utility fund by the previous owner. It goes without saying that this amount may vary from apartment to apartment.

Hot rent in Germany (Warmmiete) consists of cold rent + utilities (Nebenkosten), i.e. the full amount of rent that the tenant pays. The amount of hot rent is usually of interest to the tenant, as this is the amount he has to pay to the landlord.

Cold rent in Germany (Kaltmiete) is the rent less utilities. The amount of this rent is of interest to the property owner, as he pays the utilities further to the building authority, and the cold rent stays in his hands. From the cold rent the property owner has to pay the services of the building authority (Hausverwaltung) as well as the monthly payments to the community fund (Instandhaltungsrucklage). The amount of these payments differs from house to house.

Net rental income = Warmmiete Hot Rent -/- Hausgeld Living Fee

The hot rent (Warmmiete) consists of the cold rent + utilities (Nebenkosten), i.e. the full amount of rent that the tenant pays. The amount of the hot rent is usually of interest to the tenant because it is the amount he has to pay to the landlord.

Cold rent (Kaltmiete) is the rent less utilities. The amount of this rent is of interest to the landlord as he pays the utilities further to the housing authority and the cold rent stays in his hands. From the cold rent the property owner has to pay the house management service (Hausverwaltung) as well as the monthly instalments to the community fund (Instandhaltungsrucklage). These fees vary from building to building.

The rent (Hausgeld, Wohngeld) is the total cost of the apartment, i.e. utilities + house management + public utilities office.

In 2015, mortgage financing conditions at German banks are more favorable than ever! Average mortgage rates have reached a possible minimum (around 2-4% per annum depending on the bank and financing conditions). For foreign nationals need to have their own capital of about 50% of the value of the property and the cost of registration of the transaction of sale

Moreover, experts from leading German banks agree that around the end of 2016 will begin to increase mortgage rates.
We offer non-residents (foreign citizens) the possibility of obtaining a mortgage loan at German banks on favorable terms. Each case is considered by independent experts on an individual basis and the most suitable lending terms are selected.

It is possible to obtain a loan with various terms and conditions for a period of about 5 to 30 years with various terms of “binding interest rate” (Zinsbindung) of about 1 to 10 years.

The property can be rented out or free of lease, renovated or in need of renovation.

For commercial properties, you can get a loan only if the object is rented to a reliable tenant. Commercial sites for their own business by German banks is practically not funded.

For banks to consider the application for a loan applicant must submit the following documents:

A copy of your passport (in some cases a residence permit in Germany or other EU countries);
Completed application form (Selbstauskunft);
Proof of own funds;
Proof of stable income.
Individuals – reference from workplace, monthly salary calculations (from 2 months to 1 year depending on the bank), recent tax returns.
Entrepreneurs and private entrepreneurs – tax declarations (for the last 3-4 years depending on the bank).
Data on monthly expenses (other loans, rent, utilities, alimony, etc.)
Documents about the property (provided by broker or property owner):
an estimate of living space,
Current land registry extract (not older than 6 weeks),
insurance policy for the building,
photos of the property,
An estimate of the rental income or rent,
Rental or ploughshare agreement, including appendices and addendices,
housing regulations.

 Scheme of financing through our company:

First, our company submits a preliminary request to the German banks on the possibility of financing the client’s chosen property. At this stage only basic information about the applicant and the property is needed, without the provision of supporting documents. Within 2-7 days we get a preliminary answer.
If the preliminary answer is affirmative, the client makes an advance payment of 500 Euros for the interim reservation and removal of the property from the sales market, while the property is being considered for financing. In the case of a purchase, this amount will be included in the total amount of brokerage fees.
Client provides all necessary documents, which together with the documents and information about the property will be sent to German banks. !!! On all related issues the client consults Russian-speaking professional financier. If you have a full package of documents consideration of the application takes an average of 10-14 working days
If the bank decides positively, a contract of financing is signed with the bank, which requires the personal presence of the applicant.
The client contributes the remainder of the prepayment for the final reservation of property and execution of the contract of sale.
At the German notary the sales contract with mortgage encumbrance is signed.
The rest of the procedure for registration of the sale – the standard.

Almost all leases in Germany are for an indefinite term with the right to terminate under German law. This means that the tenant lives in the apartment for as long as they wish, unless the property owner decides to live in it themselves. If it is necessary to evict the tenant, the owner must send the tenant a special notification letter informing him of his intentions to personally reside in the apartment and asking him to leave the apartment within a certain period. According to German law, if the tenant has lived in the apartment for less than 8 years, he or she is given a period of 3 months to move out. If the tenant has lived in the apartment for more than 8 years, however, they are given 9 months to evict.

At the request of the owner, the lease in Germany can be concluded for a fixed term. In this case, the contract will expire at the end of the specified period, after which the tenant must leave the apartment.

Additional costs when buying real estate in Germany are inevitable:

Notarization: approximately 1.5% of the price fixed in the notarized sales contract.
One-time tax on the purchase of real estate in Bavaria: 3.5% of the price fixed in the notarial sales contract.
Small legal fees (preliminary and final registration, deletion of entries in the land register, obtaining an extract from the land register) amount to about 0.5%.
When buying a real estate in Germany, a broker’s fee is usually 3.57 – 7.14% of the price stated in the notarial sales contract. In this broker’s fee includes: services of intermediaries, translators, as well as full support of the client not only to the signing of the contract of sale, but also follow-up support in Russian until the final registration in the Land Register and receive an extract from it.
Brokerage fees for each individual property may deviate from these amounts.

Read more about obtaining a mortgage here!

Our company WIP Immobilien GmbH has extensive experience in the German real estate market. Please contact us, we will help you to choose a notary and we will see to it that all expenses when buying property in Germany, do not go beyond the limit of what is necessary.

The reservation of an apartment or house is made in order to take the selected property off the sales market and start the paperwork for the purchase. The reservation of the property is made by making an advance payment, which proves the seriousness of the buyer’s intentions.

The deposit is usually made equal to the brokerage commission, after which the property is reserved for the buyer by our firm as well as by the seller and is not offered to anyone else. The amount of the apartment reservation/maker’s fee is usually between 3.57 and 7.14% including VAT. Please note that the reservation amount may vary from property to property.

When the prepayment is made, a prepayment agreement is signed between the client and our company and a note is made about the reservation of the particular property. Immediately after reservation, the following documents will be given to the notary: Extract from the Land Register (Grundbuchauszug), Protocol of division of the building (Teilungserklarung), lease agreement (Mietvertrag) (if available), on the basis of which a preliminary contract of sale will be made

There are two types of payment of the purchase price in Germany:

1) through a trust account of a notary public

2) directly to the seller’s account

3) Payment through a notary’s trust account:

This method is most preferable for foreign buyers of real estate in Germany. In this case, when the sale contract is signed by the notary opens a special trust account (Notaranderkonto), through which all cash transactions are settled. No one has access to this account except the notary.
On average, the buyer is given two to four weeks to deposit the purchase price and additional purchase costs into the trust account (notary fees, real estate acquisition tax (Grunderwerbsteuer), legal costs for the preliminary and final registration, obtaining an extract from the land register, etc.).
Details of trust account should be specified in the contract of sale, and the notary additionally sends a letter about the opening of an account and the need to pay within the period specified in the contract.
To make a payment to the bank shall be provided with the following documents: contract of sale in German, the contract’s translation into Russian, a letter from the notary about the opening of a trust account and the notice from our company in Russian on the need for payment indicating full bank details in international format.
After the buyer pays the specified amount to the trust account, the notary makes all necessary payments from the trust account as bills are received: Land Court account, financial services, etc.
The purchase price is paid to the seller only after the following prerequisites for payment have been met:

Erasure by the seller of all existing debts and encumbrances recorded in the land records
Payment and receipt of the superintendent’s permission (if required) to join the society of owners
Entry of provisional registration in the land register in favor of the buyer (Auflassungsvormerkung)
Payment of all other fees

2) Direct payment into the seller’s account.

In some cases, a direct payment of the purchase price into the seller’s account may be required. Here, too, the buyer assumes no risk, as the purchase price may only be paid into the seller’s account after the following prerequisites for payment have been met

Erasing all existing debts and encumbrances recorded in the land records by the seller
Payment and receipt of the superintendent’s permission (if required) to join the society of owners
Entry of provisional registration in the land register in favor of the buyer (Auflassungsvormerkung)
Payment of all other fees

When the above prerequisites have been fulfilled a special notification (Preisfälligkeitsbescheinigung) will be issued by the notary, stating that all prerequisites for the payment have been met and that the purchase price has to be paid into the account of the owner.
In this case, both the seller and the buyer are also protected, because once the purchase price has been paid, the provisional entry in the land register is guaranteed to be changed to the final registration of the new owner.