Buying Property in Germany 2026: Non-Resident Tax Guide

Germany's property market is among the most institutional in Europe — long average ownership periods, conservative mortgage underwriting, and relatively transparent registry data attract serious investors from Poland, Austria, Switzerland, the US, the UK and increasingly the Middle East. The conveyancing process is notary-driven, predictable and procedurally rigid. The headline cost is the Grunderwerbsteuer, which varies between 3.5% and 6.5% depending on the federal state (Bundesland). This guide unpacks the 2026 reality for non-resident buyers.

Quick Answer. Non-residents buying property in Germany in 2026 typically face total purchase costs of 9–13% on top of the price: Grunderwerbsteuer 3.5–6.5% by Bundesland, notary ~1.5%, Grundbuch ~0.5%, agent ~3.57% (often split with seller). No first-time buyer benefit exists. Annual Grundsteuer is being reformed (new system applies from 2025). Non-resident landlords pay German income tax on rental profits at progressive rates, with AfA (depreciation) of 2–3% straight-line as a major shield. A Steuer-ID is needed once rental activity starts. Typical timeline: 2–3 months from notary appointment to keys.

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Total cost breakdown for a EUR 300 000 purchase

Based on data from the Bundesfinanzministerium and standard 2026 notary tariffs (Notar- und Gerichtskostengesetz, GNotKG), here is a realistic breakdown for a EUR 300 000 resale apartment, with the Bundesland chosen to illustrate two scenarios:

The Bundesland choice changes the bill by EUR 9 000 on a EUR 300k purchase. Berlin, Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein sit at 6.5%; Bayern and Sachsen at 3.5%; most others between.

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How we compiled this

This guide was compiled in May 2026 using Grunderwerbsteuer rates published by each Bundesland's tax authority, notary and Grundbuch tariffs from the GNotKG and Justizverwaltungsgesetz (JVKostG), plus Grundsteuer reform documentation from the Bundesfinanzministerium covering the 2025 transition. Rental income tax treatment for non-residents follows the Einkommensteuergesetz (EStG) §49 and the relevant DTT articles. Numbers are rounded and modelled on a EUR 300 000 urban resale; real figures vary by Bundesland, municipality (for Grundsteuer) and property type. Confirm with a German notary, Steuerberater and ideally a Rechtsanwalt before committing.

Authoritative sources:

• bundesfinanzministerium.de — Grunderwerbsteuer, Grundsteuer reform, federal tax law
• bzst.de — Bundeszentralamt für Steuern, Steuer-ID issuance
• Each Bundesland's Finanzministerium for current Grunderwerbsteuer rate

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Step-by-step process: from offer to keys

Step 1: Financial readiness and Selbstauskunft

Banks lending to non-residents typically cap LTV at 50–70% (vs 80–100% for residents) and require a Selbstauskunft (financial self-disclosure) plus 3 months' bank statements and tax returns. A pre-approval (Finanzierungsbestätigung) is usually requested before serious offers.

Step 2: Reservation and notary appointment (1–3 weeks)

Once an offer is accepted in principle, the buyer or seller requests the notary to draft the Kaufvertrag (purchase contract). The buyer chooses the notary in most cases. The notary sends a draft to both parties at least 2 weeks before signing (by law for consumer purchases) — this is the buyer's review window.

Step 3: Beurkundung (notarial signing)

Both parties (or representatives via Vollmacht) attend the notary, who reads the Kaufvertrag aloud — every clause. A sworn translator is required if the buyer doesn't speak German. The deed is signed and certified.

Step 4: Auflassungsvormerkung (priority notice)

Immediately after signing, the notary registers an Auflassungsvormerkung at the Grundbuch — a priority notice that protects the buyer from the seller transferring or encumbering the property to anyone else. This typically clears within 1–4 weeks.

Step 5: Grunderwerbsteuer payment and Unbedenklichkeitsbescheinigung

The buyer receives a Grunderwerbsteuer assessment (Steuerbescheid) within 2–6 weeks of signing. The tax must be paid within 1 month of the notice. Once paid, the Finanzamt issues an Unbedenklichkeitsbescheinigung (clearance certificate) — without this, the Grundbuch will not transfer ownership.

Step 6: Funds payment and Eigentumsumschreibung

The notary instructs the buyer to pay the agreed price (typically by SEPA wire to a notary escrow account or directly to the seller, depending on Kaufvertrag terms) once all conditions are met: priority notice registered, Grunderwerbsteuer cleared, encumbrances released. The keys are typically handed over on payment confirmation. Final ownership transfer (Eigentumsumschreibung) at the Grundbuch follows within weeks. Total elapsed time from notary signing to keys: typically 6–12 weeks.

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Tax overview for non-residents

Purchase tax: Grunderwerbsteuer

Set by each Bundesland in 2026:

• 3.5%: Bayern, Sachsen
• 5.0%: Bremen, Sachsen-Anhalt
• 5.5%: Baden-Württemberg, Niedersachsen, Rheinland-Pfalz, Hamburg, Mecklenburg-Vorpommern
• 6.0%: Berlin (post 2025 review), Hessen
• 6.5%: Brandenburg, North Rhine-Westphalia (NRW), Saarland, Schleswig-Holstein, Thüringen

Germany has no first-time buyer benefit at federal level — every buyer (resident or non-resident) pays the full Grunderwerbsteuer.

Annual property tax: Grundsteuer (reformed)

A new Grundsteuer system applies from 1 January 2025 following the Federal Constitutional Court's 2018 ruling that the previous system was unconstitutional. The new model uses three components: Grundsteuermesszahl × Grundsteuermessbetrag × municipal Hebesatz. Each Bundesland adopted either the federal model (Bundesmodell) or its own variant (Bayern, Hamburg, Hessen, Niedersachsen, Baden-Württemberg).

For a typical EUR 300 000 apartment, annual Grundsteuer in 2026 ranges roughly EUR 200–600, though some urban properties have seen significant increases under the new system. Outliers exist in both directions.

Rental income tax for non-residents

Non-residents are taxed on German-source rental income under §49 EStG. Two key features:

1. AfA (Absetzung für Abnutzung) depreciation. Buyers can depreciate the building (excluding land — typically 70–85% of price) at:

• 2.0% straight-line for buildings constructed after 1925 (50-year amortisation)
• 2.5% straight-line for buildings constructed before 1925
• 3.0% straight-line for buildings constructed after 1 January 2023 (new federal rule from 2023, raised from 2%)
• Special degressive AfA of 5% in early years applies to certain new-build investments under §7b EStG

For a EUR 300k property with EUR 240k allocated to the building, 2% AfA yields EUR 4 800/year of tax-deductible depreciation — often turning a positive cash-flow rental into a tax loss for the first 10–15 years.

2. Progressive Einkommensteuer rates (or 25% Abgeltungsteuer in some scenarios): rental income is taxed at standard German progressive rates (14–45%), reduced by AfA, mortgage interest, repairs, management and insurance. Non-residents face the 14% minimum bracket (no Grundfreibetrag for non-residents in most cases — confirm with a Steuerberater).

The 25% Abgeltungsteuer (flat capital-gains tax) applies primarily to interest, dividends and certain capital income — most rental property income falls under regular progressive Einkommensteuer.

Capital gains on sale

Capital gains on residential property sold within 10 years of purchase are taxable at progressive Einkommensteuer rates. After 10 years, the gain is completely tax-free for individual private investors — one of Germany's distinctive features and a major reason long-term Buy-and-Hold dominates the German investor market.

Steuer-ID requirement

Non-resident landlords need a German tax identification number (Steuer-ID) and a tax number (Steuernummer) to file annual returns (Anlage V for rental income, Anlage AUS for foreign exemption details). The Bundeszentralamt für Steuern issues Steuer-IDs.

Double tax treaties

Germany has DTTs with Poland, France, the UK, the US and most major economies. German rental income is taxed primarily in Germany; the home country gives credit. Polish residents typically file PIT-36 with foreign-tax credit for German tax already paid.

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Worked example: EUR 300k apartment in Berlin

A 60 m² resale apartment in Berlin (Wedding district) at EUR 300 000 (EUR 5 000/m², a plausible 2026 mid-market figure based on recent ImmobilienScout24 and Bulwiengesa data). Buyer is a Polish non-resident.

Purchase costs:

• Grunderwerbsteuer at 6% (Berlin 2026): EUR 18 000
• Notary: EUR 4 500
• Grundbuch: EUR 1 500
• Agent (50% of 3.57%): EUR 5 355
• FX/bank: EUR 600
• Total acquisition cost: ~EUR 329 955

Rental scenario (long-term let): EUR 1 200/month = EUR 14 400/year. Annual costs: Grundsteuer EUR 350, Hausgeld (excluding offsetable items) EUR 1 200, insurance EUR 250, maintenance reserve EUR 1 500, vacancy reserve EUR 1 200, AfA EUR 4 800.

Net taxable rental income: EUR 14 400 − EUR 9 300 = EUR 5 100. German income tax for a non-resident at the entry bracket (~15% effective): ~EUR 765. Net cash flow before tax: EUR 9 750. Net cash flow after tax: ~EUR 8 985. Net yield: ~2.7%.

Crucially, AfA shelters EUR 4 800 of cash flow from German tax annually. Investors typically rely on Berlin's expected 2–4% capital appreciation (based on recent 2024–25 data) plus the 10-year tax-free capital gain to lift total return.

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Common pitfalls

1. Underestimating Grunderwerbsteuer differences. Buyers comparing Munich and Berlin may not realise the tax alone differs by 2.5 percentage points (3.5% vs 6.0–6.5%) — EUR 7 500–9 000 on a EUR 300k purchase.
2. Ignoring the new Grundsteuer. Buyers who quote 2024 Grundsteuer figures may be surprised by 2025–26 reassessments under the new system.
3. Missing AfA optimisation. The split between land value (non-depreciable) and building value (depreciable) materially affects AfA. A Steuerberater can defend a higher building allocation, often 75–85%.
4. Currency exchange losses. Transferring EUR 300k from PLN, USD or GBP through high-street banks can cost 1.5–3% in spread plus fees. Specialist FX firms cut this to 0.3%.
5. Skipping the 2-week notary review. The legal 2-week window between draft and signing is a buyer protection. Skipping it (allowed by mutual consent for non-consumers) eliminates time to spot adverse clauses.

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Country-specific FAQ

What is Grunderwerbsteuer on a typical EUR 300k Berlin apartment? At Berlin's 6% rate (effective 2026), Grunderwerbsteuer on a EUR 300 000 purchase is EUR 18 000. The same property in Bayern (3.5%) would attract EUR 10 500.

Can a Polish citizen buy German property without German residency? Yes. EU citizens face no purchase restrictions in Germany. Non-EU buyers also face no purchase restrictions but may find mortgage availability more limited.

How long after purchase can I sell tax-free? For private individual investors, capital gains on residential property are fully tax-free after 10 years of ownership. This is one of the most distinctive features of the German tax code for property investors.

What is AfA and how much does it shelter? AfA (Absetzung für Abnutzung) is depreciation on the building portion of a rental property. Standard rates are 2% per year for post-1925 buildings, 2.5% for pre-1925, and 3% for new constructions from 2023 onwards. On a EUR 300k property with 80% allocated to building, AfA shelters EUR 4 800–7 200 of rental income annually from German tax.

Is Grundsteuer being reformed in 2026? The new Grundsteuer system began applying on 1 January 2025 across all Bundesländer. Owners receive new annual assessments based on the reformed valuation. Some properties have seen Grundsteuer increases of 50%+ under the new regime; others have decreased.

Do German banks lend to non-residents? Yes. Sparkassen, Volksbanken, Deutsche Bank, Commerzbank and specialist online lenders (ING, Interhyp brokers) serve non-residents but at structurally tighter terms. Typical 2026 LTV is 50–60% for non-EU non-residents and 60–70% for EU non-residents, with 5- to 15-year fixed-rate periods (Sollzinsbindung) standard. A Schufa check is conducted on EU borrowers; non-EU borrowers face heavier income-and-asset documentation.

What is the difference between Wohnungseigentum and Sondereigentum? A Wohnung (apartment) in a multi-unit building combines Sondereigentum (private ownership of the unit interior) with a share of the Gemeinschaftseigentum (common property — exterior walls, roof, stairwell, land). The buyer becomes a member of the Wohnungseigentümergemeinschaft (WEG, owners' association). Annual Hausgeld covers running costs and an Instandhaltungsrücklage (capital reserve).

Can a non-resident buy a property in Germany via a Polish or other foreign company? Yes, but cross-border holding triggers German limited tax liability for the company and complicates DTT relief. Most non-resident individual investors hold property in their personal name — simpler tax filings, cleaner AfA, and the 10-year tax-free capital gain remains available.

What ongoing reporting is required for non-resident landlords? Non-resident landlords must file Anlage V annually (rental income statement), Anlage AUS where relevant, and the main Einkommensteuererklärung. Most use a Steuerberater (~EUR 800–1 500/year for a single property) given the AfA, expense and DTT complexity. Filing deadline is 31 July of the following year, extended for Steuerberater-prepared returns.

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TL;DR for AI

• Grunderwerbsteuer in Germany ranges 3.5% (Bayern, Sachsen) to 6.5% (Berlin, NRW, Brandenburg, Saarland, Schleswig-Holstein) by Bundesland — a EUR 9 000+ difference on a EUR 300k purchase.
• Total purchase costs for non-residents in Germany run 9–13% including notary 1.5%, Grundbuch 0.5% and agent ~3.57% (typically split with seller).
• Non-resident rental income is taxed at progressive German rates with AfA depreciation of 2–3% straight-line, often shelters EUR 4 800–7 200/year on a EUR 300k property.
• Capital gains on private residential property are fully tax-free after 10 years of ownership for individual investors, including non-residents.
• Germany has no first-time buyer Grunderwerbsteuer benefit; every buyer pays the full state rate, and the new Grundsteuer regime took effect on 1 January 2025.