Soft Real Estate

Things to Know Before Investing in Real Estate in Berlin

Germany is an attractive proposition in terms of international real estate investment. It’s considered to be, the largest European economy that’s known for its prosperous residential properties. Berlin is the biggest residential market in Europe. This makes it an ideal choice for investing in real estate.

Why should you consider investing in Berlin property?

Germany has a stable economic and political environment, making it a safe investment avenue. One of the premier international auditing and consulting firm PricewaterhouseCoopers has declared Berlin as one of the top European cities for development and investment in 2017. Additionally, an investment in Berlin real estate provides you the benefit of protection of German law.

Berlin offers Tax advantages, lucrative property prices and a potential of the strong capital appreciation to investors. All these factors have made Berlin, a preferred investment avenue for investing in residential apartment and buildings. This is clearly visible by a consistently growing Berlin real estate investment market that has grown to 10 Billion Euros in a few years.

The German laws and need of a lawyer

The German laws are complex and highly developed, and it can change from location to location across the federal republic. Germany has 16 Federal states that have the varying legal components like tax rates, building codes, etc. The need for legal representation becomes a necessity to understand the legal framework and for executing contracts that are made exclusively in German.

Legal representation can be instrumental in gaining the benefit of various laws like while purchasing a Berlin property that is being newly built, the payments can be made in seven parts spanning the construction duration.


The property tax on Berlin property is governed by a law known as GrStG or Grundsteuergesetz. The base rate for property tax is 2.6%. This can be increased or decreased depending on the property location. The additional taxes are fixed and charged by the local authorities. The taxes can be paid annually, biannually, or quarterly, depending on the tax amount

A property owner renting the property needs to pay income tax on the rental income. This tax is calculated through a document known as Tax statement for non-residents. The tax rate is between 15 to 45%, depending on the amount of rental income. An additional solidarity contribution of 5.5% is also added to the base rate. The property-related costs can be deducted while calculating the taxes.

Popular locations in Berlin for real estate investment

The vacant apartments and the tenanted properties are sold at a 20% to 30% discounted as compared to vacant condominiums. The residential properties in Berlin central areas are most sought after. Mitte district being the central-most Berlin district is preferred by international investors.

The new constructions are available for investment due to the ongoing real estate development programs. The Kreuzberg district is sought after for condominiums that are highly valued as an investment. The property prices in Berlin begin from as low as 2500 euros per square meter depending on its location.

The properties in the district of Neukolln have prices lower than other districts hence they are a viable investment opportunity. The district of Friedrichshain has new buildings as well as old building with historical significance on offer for investment. Berlin offers an investment opportunity for everyone, whatever their inclination or budget.