1. 1. Frequently Asked Questions FAQ 1. How to reserve a property? 2. Can I buy without seeing the property? 3. I cannot be in Germany while purchasing,can I still buy? 4. Can a property, which is rented out be sold? 5. Are there any tax advantages? 6. How to increase rent? 7. How to get a mortgage in Germany? 8. What are property management costs? 9. Do I have to pay tax, if I am selling my property? 10. What is the buying process?
2. 2. 1. How to reserve a property? A deposit of 3,000 is required A copy of your passport is required
3. 3. 2. Can I buy without seeing the property? Yes, we do have properties with a steady income, so it is enough to see the property online and evaluate the financial information. However, we recommend to make a viewing, if possible.
4. 4. 2. Can I buy without seeing the property? Yes, we do have properties with a steady income, so it is enough to see the property online and evaluate the financial information. However, we recommend to make a viewing, if possible.
5. 5. 3. I cannot be in Germany for the period of the purchasing process, can I still buy? Yes. A certified Power of Attorney (POA) needs to be signed by you. This certifies your legal representative to act in your name and on your behalf. The POA needs to be recognized at the German Embassy or at your chosen Notary Public. By using the services of a Notary Public the POA needs to be on to the Foreign Office of your country in order to receive an Apostil.
6. 6. 4. Can a property, which is rented out be sold? Yes. All the costs related to the property management company (running costs) are paid through renters. This consists of electricity, water, maintenance, minor repairs and rental management etc. The monthly rental covers these expenses and also provides additional return for the investor. The return lies between 4% - 10%, providing a consequently self-financing investment. The highest return on the investment is the capital appreciation. Experts forecast that the real estate prices in Berlin will appreciate.
7. 7. 5. Are there any tax advantages? Once selling the property, the return can be re-invested in a further property, which mitigates any tax liability. If selling the property after ten years there is no capital gains tax liability.
8. 8. 6. How to increase rent? Rents can be raised once a private renovation has been done. Property management firms can use their market knowledge and can recommend the appropriate rent level. However, there are limitations on the maximum amount of rent, which can be increased. Generally, rents cannot rise above 20% within three years. Additionally, there are properties, where rents are being controlled and cannot be amended for a certain period (depending on the terms and conditions).
9. 9. 7. How to get a mortgage in Germany? Everyone with proof of existing finance can purchase a property in Germany. In case of buying real estate with a mortgage provided by a German bank a binding confirmation of loan financing from that bank is needed. We can introduce you to banks and financial institutions, which can provide you the most suitable mortgage and financial products. We can take over the entire financing process, while working with the Deutsche Bank or Creditweb. In this case the financing will lie between 80% - 85%. What are the service charges and fees? Property agent service charge (7,14%) Property Acquisition Tax (6%) A notary service charge of (1-1,5%) A land registry fee (ca. 1%) Mortgage arrangement fee (ca. 1%)
10. 10. 8. What are property management costs? Our properties offered have a property management firm in place, taking care of all property administration and maintenance services. This consists of electricity, water, maintenance, minor repairs and rental management etc. The monthly rental covers these expenses and also provides additional return for the investor.
11. 11. 9. Do I have to pay tax, if I am selling my property? By reselling the property within ten years of the purchase, the investor normally needs to pay Capital gains tax at the income. The income tax rate provides the level of the capital gains tax.
12. 12. 10. What is the buying process? 1. Find the right property. 2. Make a reservation. 3. Retain the services of an international solicitor with property acquisition specialization based in Berlin. 4. The law firm will offer you with all necessary Legal Review Reports and contracts regarding the property. 5. Pay a service charges and fees. 6. Sign the binding Agreement. 7. Pay for the property.