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The procedure and incidental costs involved in buying a house in Hamburg and the surrounding area

Maintain an overview at all times

Purchasing real estate is an extensive procedure involving different steps and institutions. After making the decision to buy and securing finance, a notary is first agreed on, as the purchase of real estate requires certification by a notary. The land register is examined by the notary, the contract drafted and the drafts sent to the buyer, the seller and us to be checked. After approval of the draft contract and the clarification of any questions, an appointment with the notary is arranged. The buyer and seller or their authorised representatives must attend the appointment in person; we are also present at the notarisation. The contract is read out in full, amended if necessary and then signed.

Within a short time of this, a priority notice in respect of the conveyance is registered in the relevant land register. This equates to contractual legal assurance of the acquisition. In the event of financing, a charge over the land is also created and notarised. The notary additionally organises any documentation necessary to legally acquire the property free from encumbrances, e.g. declarations to waive preemption rights, documents to extinguish any registered charges, declarations of approval from the property management in the event of the acquisition of an apartment and the clearance certificate following the payment of land transfer tax.

Between 1 and 3 months after notarisation by the notary, the buyer usually receives a request to pay the purchase price (by a notice that payment is due) and instructs his/her bank to make the payment - either to the notary’s so-called escrow account or by direct payment to the seller. Handover takes place directly after receipt of the purchase price. We carry out the handover together with the buyer and the seller and record it in a handover certificate. A record is made of meter readings and what keys are handed over and this is signed by both parties. The buyer is now the owner of the real estate and entitled to its full use.

After receipt of the full purchase price is confirmed to the notary, the notary submits the application to the land registry to register the transfer (this occurs independently of handover). Depending on the land registry’s workload, the transfer is declared in writing 3 to 12 months after notarisation. This equates to the transfer of ownership in rem and concludes the purchase of the real estate.

The following ancillary costs should be noted in relation to the purchase of real estate in Germany:

Financing costs

A bank loan is normally used when buying real estate, whereby the ancillary costs of the loan vary widely depending on the credit institute, own capital and amount of credit. Any processing fees, valuation costs, commitment fees, partial payment supplements and unscheduled repayment charges that may arise should be considered.

Land registry fees and notary’s fees

Court costs accrue for the activities of the land registry. As a rule, the fees of the land registry and notary amount to around 1.5 to 2 % of the purchase price and depend on the amount of the purchase price and the federal state. The higher the purchase price, the lower the percentage rate.

Land transfer tax

The land transfer tax calculated by the tax authority is collected on the basis of the German Land Transfer Tax Act. There is no uniform provision in relation to land transfer tax that applies to all federal states, so that the amount of land transfer tax varies between 3.5 and 6.5 %. In Hamburg it is currently 4.5 %, in Schleswig-Holstein 6.5 % and in Mecklenburg-Vorpommern and Niedersachsen 5 %.

Agent’s commission 

The agent’s commission is a so-called success commission and is only charged in the event that the purchase of an apartment or house is successful. The amount of commission is 6.25 %, including 19 % value added tax.

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