Financing a property as a foreign taxpayers

Immobilienfinanzierung als Steuerausländer

Financing a property as a foreign taxpayers

You do not live in Germany, but would like to buy a property in Germany?

If you do not have your residence or habitual abode in Germany, you are referred to as a non-resident for tax purposes. Even 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 bilateral tax treaties in force 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 breaks or exemptions apply to non-residents.

Non-resident taxpayers who earn their income abroad and wish to purchase and finance real estate in Germany may have to rely on a limited group of banks due to their specific situation. Not all banks are willing to offer real estate financing for non-residents for tax purposes, as they have to consider additional risks and legal aspects.

However, there are banks and financial institutions that specialize in financing real estate for non-residents for tax purposes or are willing to offer such loans. These banks usually have experience with the specific requirements and framework conditions for non-residents for tax purposes and can offer individual financing solutions.

Find out your home's sales or rental value

Determine the current value of your property quickly and without obligation online. Benefit from a free initial valuation for your house or flat.

» Try it out.

As a non-resident for tax purposes, there are certain steps and requirements that you should follow in order to obtain real estate financing in Germany.

Here are some important points:

  1. Demonstrate creditworthiness: To obtain real estate financing in Germany, it is important to have a good credit score. Banks will check your credit score to determine if you are able to repay the loan. This includes factors such as your income situation, credit history and employment status.
  2. Equity: Generally, banks expect buyers to contribute a certain amount of the purchase price as equity. The exact amount varies by bank and individual situation. It is recommended that you have enough equity to cover a portion of the property price.
  3. Financing options: In Germany, there are several financing options for real estate buyers. One common method is to take out a mortgage loan with the property as collateral. There are also other forms of real estate financing, such as building society loans or KfW loans (development loans from the "Kreditanstalt für Wiederaufbau"), which can offer lower interest rates or other advantages under certain conditions. However, the following applies: those who have their current residence (or center of life) in a non-EU country are left empty-handed when it comes to BEG subsidies. The only exception: with a residence in Switzerland, subsidies are possible.
  4. Foreign income and assets: As a non-resident for tax purposes, you may have to prove your income and asset situation abroad. This may include proof of income, tax returns or other documents proving your financial situation.
  5. Banking relationships: It may be helpful if you have existing banking relationships in Germany or apply for financing with a bank that has experience with foreign clients. Some banks have special programs or services for foreign clients.
  6. Tax aspects: As a non-resident for tax purposes, you should be aware of the tax implications of purchasing real estate in Germany. This includes issues such as taxation of rental income or potential tax treaties between Germany and your home country. You can find more information on this topic in our Berlin real estate talk with attorney Volker Mauch » here
  7. Advice and support: It is advisable to seek support from an experienced financial advisor or a company specializing in financing for foreign buyers. They can help you select the right financing options, guide you through the process and assist you in communicating with banks and other parties.

Since the framework conditions vary greatly depending on the current place of residence, the income situation and the location of the property to be financed, you should quickly get in touch with an external financing expert. He or she can very quickly clarify which financing options are suitable for you when financing a property.

We support you!

Book a 30-minute free consultation.

Discuss your questions about buying or selling your property individually, without obligation and free of charge with Achim Amann | Managing Director of Black Label Properties.

» Book a consultation

News on the topic of financing

You are an Expat living in Germany and looking to buy?
Finding the ideal financing for your dream property requires careful planning and analysis of your financial situation. To support you in this, the experts of Hypofriend will explain you the different types of real estate loans and financing options available to you in our next Berlin Real Estate Talk ...
Financing a property as a foreign taxpayers
As an internationally operating company, we can recommend specialized real estate financing intermediaries or refer you to the right contacts who can help you with your financing needs ...
Real estate and taxes - What you always wanted to know!
It is important to familiarize yourself with the tax regulations for real estate in Germany and, if necessary, to seek professional support from a tax advisor or real estate expert. We would like to support you in this with our 43rd Real Estate Talk ...
Taxes and transaction costs when buying and selling real estate in Germany
Germany is a popular destination for real estate investment, thanks to its stable economy, attractive property prices, and favourable legal system. However, like in any other country, buying and selling real estate in Germany is subject to certain taxes and fees ...
Financing Your Property with Martin Bonnet
There are a wide variety of loan options that can be used to finance the purchase of a house or apartment. Finding the right loan is a particular challenge. Financing advice is helpful, whereby the focus should always be on the individual situation of the buyer ...
No capital, no chance? Successful investing and financing
We are speaking to former Berliner Bank boss and investor Stefanie Salata about interest rate trends and financing options for buyers of condominiums and single-family homes. What does the expert advise: buy quickly now or wait until prices drop? What should real estate sellers consider now? ...