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Property ownership

The costs of owning a property in Germany differ depending on the type and size of the property, the location, and other individual circumstances. However, as a general guide, owners should bear in mind the following:

• Income tax – using the example of a UK or Irish owner of German property, who’s only income in Germany is from renting out their property, the owner will be liable for income tax on rental income and from chargeable gains on sale (the difference between the amount paid for the property and the proceeds of sale, adjusted for indexation). Income tax paid in Germany is a credit against income tax payable in the individual’s home country, as the UK and Ireland both have double taxation agreements in place with Germany.
  
  Income tax payable on rental income stands at 25% on a chargeable income up to around €25,000, after which the tax rate increases on a sliding scale. Properties owned for ten years or more are exempt from income tax on capital gains.
  
  
• Property tax – this differs depending on the town, but tends to be a relatively small amount. Tax payable on an average apartment is likely to be between €150 and €300 for the year; the tax payable on a house may be more, depending on the plot size.
  
  
• Maintenance reserve fund – if the property is part of a community, this mandatory cost will usually amount to a monthly charge of €0.75 to €1.5 per sq. m. of living area.
  
  
• Additional costs – these include charges for electricity, water, and refuse collection.
  
  If the ‘property is rented out, then the costs borne by the owner vary depending on what is agreed in the rental contract. The law governing rental agreements tends to come down on the side of the tenant. However, the property tax, maintenance reserve fund and additional costs can be passed on to the tenant.
  
  
• Property management – if the property is to be rented out, the owner may choose to employ a property management company at an approximate monthly cost of between €25 to €35 (plus VAT) for an apartment.

Related items

Documents and Reports

	Germany property investment report (409Kb)
	Germany country guide (860Kb)
	Germany property buying guide (953Kb)
Documents and Reports

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