Four tips for a more affordable dream apartment

Whether you want to build, buy, or rent: housing has become expensive in many regions of Germany. However, you can save money smartly by taking advantage of government subsidies and considering a few important tips.

Affordable housing is and will remain scarce in Germany. But how can building or buying become a bit more affordable?

1. Existing properties

In eastern Germany and rural regions like the Bavarian Forest and Saarland, many houses stand empty. The main reason is the lack of infrastructure. But more working from home and less mandatory office attendance could help. Those who buy early could benefit from the currently low prices and potentially also from future investments in infrastructure.

2. Save on property transfer tax

The simplest approach is to first purchase the undeveloped plot of land and pay the land transfer tax. This way, no further tax is due on the subsequent construction. The seller of the land and the construction company must be independent; otherwise, the tax office will consider them a single contract and assess the tax for both the land and the house.

Savings can also be achieved when buying a used property. Two separate purchase contracts are advisable here: one for the property itself (including taxes) and one for the fitted kitchen, garden shed, and sauna (excluding taxes), as these are not part of the property.

A third possibility: Real estate transfer tax varies depending on the federal state, from 3.5 percent in Bavaria to 6.5 percent in North Rhine-Westphalia. For a €500,000 property, this makes a difference of €17,500 to €32,500.

3. Negotiation skills when buying real estate

This is precisely where a real estate agent can be very helpful, exploring the best negotiating options and potentially achieving savings of tens of thousands of euros. It's advisable to first observe the market. After some time, you'll recognize which properties have been on the market longer and why. An initial viewing provides further information about the reason for the sale, for example, whether a divorcing couple needs money quickly and is therefore willing to negotiate.

4. A clever financing strategy

Finding the best bank requires a smart move: Consult an independent mortgage broker for a comprehensive market overview. They will compare offers for you. If you manage to reduce the mortgage rate on your €400,000 loan for your €500,000 property from 4.1% to 3.8%, you'll save almost €20,000 in interest over 25 years. An experienced broker can also assist you in identifying the best financing options and ultimately help you save real money.

Are you looking for your dream property? Contact us. We'd be happy to advise you!

Notice

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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