Note: As the framework conditions vary greatly depending on your current place of residence, income situation and the location of the property to be financed, you should quickly contact an external financing expert. They can very quickly clarify which financing options are suitable for you when financing a property.
You do not live in Germany, but would like to buy a property in Germany?
If you are not resident or ordinarily resident in Germany, you are classed as a non-resident taxpayer. This also applies if you live and work abroad as a German. As a rule, special tax regulations apply to non-residents, which may vary depending on the applicable bilateral tax treaties between Germany and the non-resident's country of residence. These regulations determine the extent to which income from certain sources is taxed in Germany and which tax relief or exemptions apply to non-residents.
Non-resident taxpayers who receive their income abroad and wish to purchase and finance a property in Germany may have to rely on a limited number of banks due to their specific situation. Not all banks are prepared to offer property financing for non-residents, as they have to take additional risks and legal aspects into account.
However, there are banks and financial institutions that specialise in financing properties for non-residents or are prepared to offer such loans. These banks usually have experience with the specific requirements and framework conditions for non-residents and can offer customised financing solutions.
As a non-resident taxpayer, you should familiarise yourself with the special requirements and steps that apply to property financing in Germany.
Here are some important points:
- Prove creditworthiness: To obtain property financing in Germany, it is important to have a good credit rating. Banks will check your credit rating to determine whether you are able to repay the loan. This includes factors such as your income situation, your credit history and your employment status.
- Equity: As a rule, banks expect buyers to contribute a certain proportion of the purchase price as equity. The exact amount varies depending on the bank and individual situation. It is recommended that you have enough equity available to cover part of the property price.
- Financing options: In Germany, there are various financing options for property buyers. One common method is to take out a mortgage loan where the property serves as collateral. There are also other forms of property financing, such as building society loans or " KfW loans (promotional loans from the Kreditanstalt für Wiederaufbau)which can offer lower interest rates or other benefits under certain conditions. However, if your current place of residence (or centre of life) is in a non-EU country, you will not be eligible for BEG funding. The only exception is if you are resident in Switzerland.
- Foreign income and assets: As a non-resident taxpayer, you may have to provide evidence of your income and assets abroad. This may include proof of income, tax returns or other documents that prove your financial situation.
- Banking relationships: It can be helpful if you already have existing banking relationships in Germany or if you are applying for financing from a bank that has experience with foreign customers. Some banks have special programmes or services for foreign customers.
- Tax aspects: As a non-resident taxpayer, you should find out about the tax implications of buying property in Germany. This includes issues such as the taxation of rental income or potential tax treaties between Germany and your home country. You can find more information on this in our Berlin property discussion with lawyer Volker Mauch " here
- Counselling and support: It is advisable to seek support from an experienced financial advisor or a company specialising in financing for foreign buyers. They can help you choose the right financing options, guide you through the process and help you communicate with banks and other parties.
