General country information
At the heart of the EU, Germany is a federal republic comprising 16 ‘Bundesländer’ (states). Re-united in 1990 after 45 years of separation into the Soviet controlled East Germany and West Germany, the country has borders with Austria, Belgium, Czech Republic, Denmark, France, Luxembourg, the Netherlands, Poland and Switzerland. 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.
The German economy is expected to grow 0.3% in 2013 and by 1.5% in 2014, a downgrade from Deutsche Bundesbank’s previous estimates of 0.4% and 1.9%. The continuing structural problems in the euro zone are dragging Germany’s economy down. The EU accounts for almost two-thirds of German exports and German banks are major creditors of the vulnerable economies.Germany is the 5th largest economy in the world with major interests in car manufacturing and engineering as well as in service industries such as banking and insurance. It is the most populous country in the EU and is generally viewed as the ‘powerhouse’ of Europe.
Property prices have started to pick up, with the hedonic house price index showing that new homes rose by 5.2% (4% in real terms) and existing homes up 8.7% (7.4% in real terms) during the year to April 2013.
Munich is the leading the rise in the south, with Frankfurt, Hamburg and obviously Berlin also popular.
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 (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 buy property in Germany without restriction.
Property purchase costs are around 9.07% to 14.84%% of the total price. Real estate transfer tax is levied at 3.5% to 5%, depending on the federal state where the property is located. Real estate agent’s fee is negotiable from 3% to 6%, plus 19% VAT.
Rental income tax is quite high, taxed at progressive rates up to 45%. On the plus side, properties become exempt from capital gains tax after 10 years.
When buying 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, should have contracts translated if necessary, and are recommended also to employ a tax accountant. They must also satisfy themselves on the condition of the property they are buying.
Principal cities: Berlin, Cologne, Frankfurt, Hamburg, Munich,
Median age of population: 43
Employment rate: 92.9%
Flying time from UK: 1.2 hours
Currency: 1 euro = 100 cents
Time difference from UK: + 2 hour
Rate of inflation: 2.00%
International dialling code: ++49
GDP per person: $43,689
Climate: Temperate: cool, cloudy, wet winters