Enjoying a holiday home close to home, this is possible with a holiday home in Germany. Germany has a good investment climate for buying a holiday home. Popular areas such as the Eifel and Winterberg generally offer good returns. In addition, of course, there are plenty of other arguments to invest. Before investing in a house in Germany, it is important to inform yourself well. This country dossier is a good start.

Enjoyment with attractive returns

Popular areas such as the Eifel and Winterberg generally offer good rental yields. In addition, of course, there are plenty of other arguments to invest. Buying a holiday home in Germany may not be the first thought, yet Germany is unprecedentedly popular. What many people do not know is that Germany is a very interesting holiday country for short or long holidays. This will only benefit the possible rental of your holiday home. However, it is important to know that buying a property is different from buying in the Netherlands. So inform yourself well or read the information below before buying a holiday home in Germany.

Second home in Germany: the buying process

In Germany, in order to acquire property, you need to conclude two agreements: 1) Kaufvertrag 2) Auflassung. Next, the property has to be registered in your name in the land register (= Grundbuch). First of all, you conclude a 1) Kaufvertrag (purchase agreement) then both parties must agree, that the ownership of the plot of land and the property is transferred to the buyer. This is called 2) Auflassunggenoemd in Germany. Finally, the ownership changes must be registered in the Grundbuch. Only after the name of the new owner has been registered in the Grundbuch is the buyer definitely the new owner.

Notarial deed

Both new buildings and existing buildings can legally only be acquired in combination with the corresponding land plot. Whoever buys a plot of land automatically acquires the buildings on it. Under Section 313 of the German Civil Code, a notarial deed is required when buying and selling German real estate. The notarial deed is required for both the Auflassung and the Kaufvertrag (purchase agreement).Whoever wants to be sure to obtain ownership of the land from the seller should make an appointment with the notary as soon as possible. Verbal agreements with the seller are not binding in Germany! When there are no more questions then you can proceed to signing the deed.

Buying a vacation home in Germany: Buyer’s obligations

A prospective buyer of a second home in Germany has certain obligations. The buyer must carefully inspect the condition of the property and its installations (water supply and drainage, sewage system, electricity, heating, etc.). After signing the purchase agreement, the buyer cannot hold the seller liable for (visible) defects or issues that the buyer could have identified during a thorough inspection prior to the purchase.

From purchase agreement to notarial deed

Once the purchase agreement is finalized, the buyer is entitled to the transfer of ownership. In Germany, it is customary to include the Auflassung (transfer declaration) in the purchase agreement (Kaufvertrag) to minimize notary fees.

Contingency clauses in the purchase agreement

In Germany, it is uncommon to include a financing contingency clause in the purchase agreement. If, as a Dutch buyer, you would like to include such a clause, you can ask your notary to advise on its formulation. Allow approximately 2 to 3 weeks to arrange financing. If the financing is not yet secured, it is wise to include such a contingency clause in the agreement. The clause will specify the time frame within which financing must be arranged.

If financing cannot be secured by the agreed-upon date, the buyer has the right to terminate the contract. Even if an Auflassung has been agreed upon, it will also be canceled. Additionally, any entries made in the Grundbuch (land registry) can then be removed at the seller’s request.

Registration in the “Grundbuch”

The Grundbuch (land registry) is not entirely comparable to the Dutch land registry, although there are few significant differences regarding property registration. Before converting the purchase agreement into a notarial deed, the notary is legally required to consult the Grundbuch. The notary will verify that the information in the purchase agreement matches the data in the Grundbuch.

Preliminary registration/annotation in the Grundbuch

Since the land registry requires time to process the registration, the buyer can usually request an annotation (Auflassungsvormerkung) in the Grundbuch through the notary. This annotation confirms the agreement between the buyer and seller regarding the transfer of ownership.

If such an annotation is not made, the seller could, in the period between signing the purchase agreement and the final registration in the Grundbuch, transfer ownership to a third party. Additionally, creditors of the seller could attempt to enforce foreclosure on the land and property during this time. An Auflassungsvormerkung prevents these issues.

If disputes arise from the purchase agreement, they must be resolved in a German court.