German Real Estate, Tax & Legal Terms: A Glossary for Foreign Owners
The German words that quietly decide what you can do with your property - explained in plain English.
- Grunderwerbsteuer (6% in Berlin) plus notary and land-registry fees push real acquisition costs well above the purchase price.
- Hausgeld, the WEG and the Hausverwaltung govern your monthly costs and what you can decide alone.
- Milieuschutz, Vorkaufsrecht and conversion limits can restrict how you renovate, convert or sell.
- An Erbschein and the Grundbuch entry are what actually let an heir take control of an inherited flat.
- A notarised Vollmacht is what makes buying, selling or managing remotely possible.
German property runs on a vocabulary of its own. A handful of words - on a tax bill, a building resolution, or an inheritance file - quietly decide what you can and cannot do with your flat. Here is the plain-English version.
If you own, are inheriting, or are buying property in Germany from abroad, the obstacle is rarely the property itself - it is the German-language system around it. This glossary covers the terms that come up most often, and why each one matters to an owner who does not live in the country. When you are ready, bring us the file and we will translate the whole picture into one plan.
Buying & ownership costs
Grunderwerbsteuer (real estate transfer tax)
A one-time tax paid when you buy, set by each federal state. In Berlin it is 6% of the purchase price. It is the single largest line in your closing costs and is due shortly after the notarised purchase.
Grundsteuer (annual property tax)
A recurring municipal tax on the property, reassessed under Germany's 2025 property-tax reform. It is modest compared with the transfer tax but is an ongoing yearly cost every owner carries.
Hausgeld (monthly service charge)
The monthly amount each owner pays into the building's budget for running costs, maintenance and reserves. It is separate from any mortgage and continues whether or not the flat is rented - a recurring cost absentee owners often underestimate.
Notar (notary)
Property transactions in Germany must be notarised. The Notar is a neutral officer who drafts and certifies the deed and oversees the transfer - not your lawyer. Every purchase and sale passes through one.
Grundbuch (land register)
The official register where ownership and charges (such as mortgages) are recorded. You become the legal owner when the change is entered in the Grundbuch - the contract alone is not enough.
The building & who decides
WEG (Wohnungseigentümergemeinschaft)
The community of all owners in a building. Decisions about shared parts - the roof, façade, heating, major works - are made collectively by owner vote, which means you cannot act unilaterally on anything beyond your own unit.
Hausverwaltung (building management)
The company that administers the building and the WEG day to day - budgets, maintenance, meetings and the Hausgeld. For an absentee owner, this is the entity you (or we, on your behalf) deal with most.
Teilungserklärung (declaration of division)
The founding document that divides a building into individual units and defines what is private property versus shared. It also sets your share of costs and voting weight - worth reading before you buy.
Renovation & conversion restrictions
Milieuschutz (social-conservation area)
Designated areas - Berlin has many - where renovations, luxury upgrades and conversions are restricted to protect existing residents from displacement. It can limit what you are allowed to do to your own flat. We cover this in the Berlin renovation permits guide.
Vorkaufsrecht (municipal right of first refusal)
In certain protected areas the municipality can step in and buy a property on the agreed terms before the buyer. It can complicate and slow a sale, so it is worth checking early.
Umwandlungsverbot (conversion restriction)
Rules that restrict converting rental buildings into individually-sellable condominiums. They directly affect investor exit strategies and what a building can become.
Baugenehmigung (building permit)
The permit required for structural changes and many changes of use. Cosmetic work usually does not need one; moving walls, changing layouts or use generally does.
Denkmalschutz (heritage protection)
Protection placed on listed buildings. It restricts what you may change on a historic Altbau, but can also unlock tax advantages for approved restoration work. Our renovation service works within these rules.
Renting it out
Mietpreisbremse (rent brake)
A cap, in tight housing markets, that limits the rent on a new lease to roughly 10% above the local reference rent (Mietspiegel). It directly affects how much rent you can charge when re-letting.
Mietendeckel (the Berlin rent freeze)
A separate, stricter Berlin rent freeze introduced in 2020 and struck down by the Federal Constitutional Court in 2021. It is no longer in force - do not confuse it with the still-active Mietpreisbremse.
AfA (depreciation, Absetzung für Abnutzung)
The tax depreciation you can deduct each year on the building portion of a rental property, reducing your taxable rental income. One of the most useful and most overlooked deductions for a non-resident landlord.
Inheritance & acting remotely
Erbschein (certificate of inheritance)
The German document proving who the legal heirs are. German registries and banks typically require it (or a European Certificate of Succession) before an heir can deal with an inherited property. See our complex cases service.
Erbengemeinschaft (community of heirs)
When several people inherit together, they jointly own the estate until it is divided, and many decisions need agreement among all of them. One heir can effectively block a sale - a frequent source of deadlock we help resolve.
Vollmacht (power of attorney)
A (usually notarised, often apostilled) authorisation letting someone act for you. It is the practical mechanism that lets you buy, sell or manage a German property without being there in person.
Zwangsversteigerung (foreclosure auction)
A court-ordered auction of a property. For investors it is a channel for discounted, distressed purchases; for owners in difficulty it is the outcome to avoid.
This glossary is general information for orientation, not legal or tax advice. Rules, rates and thresholds change and depend on your specific situation - we confirm the current detail with the relevant local professionals on every file.
