Renting out property in Germany: landlord guide

Costs of buying

• Real estate transfer tax (Grunderwerbsteuer) is set by each state: from 3.5% in Bavaria to 6.5% in states such as North Rhine-Westphalia and Brandenburg.
• Notary and land registry fees add about 1.5–2% of the price.
• For homes bought by private buyers, the agent's commission is usually split equally between buyer and seller.
• Property tax (Grundsteuer) is charged every year by the municipality, under rules reformed from 2025.

Buying as a foreigner

• There are no restrictions on foreigners buying property in Germany and no extra tax for foreign buyers.
• Banks lend to non-residents, often with a larger down payment; a German bank account helps with paying the purchase and running costs.

Official guidance: Federal Ministry of Finance · Real Estate Transfer Tax Act (Grunderwerbsteuergesetz)

How rental income is taxed

• Rental profit is taxed with your other income at progressive rates up to 45%, plus the solidarity surcharge at high incomes.
• Non-residents are taxed in Germany on German rental profit and file a German return each year; they generally don't get the tax-free basic allowance.
• Returns are due by 31 July of the following year, later with a tax adviser.
• Gains on a rented home sold more than 10 years after buying it aren't taxed in Germany.

Expenses claimable against rental income

• Loan interest, property tax, insurance, and the service charges and management fees you can't pass on to the tenant.
• Repairs and maintenance. Large works in the first three years after buying (over 15% of the building's price) are added to the building's value instead.
• Depreciation of the building (not the land): 2% a year for buildings completed 1925–2022, 3% for those completed from 2023.
• Agent fees for finding tenants, accounting and travel to the property.

Tenancy rules

• The deposit is at most three months' rent excluding service charges, kept separate from your own money.
• In designated tight markets the rent brake, extended to the end of 2029, limits the rent for a new tenancy to 10% above the local comparative rent (new buildings and first lettings after a full renovation are not covered).
• Rent for a sitting tenant can rise by at most 20% in three years (15% in tight markets), and not above the local comparative rent.
• Tenants are well protected: landlords need a legal reason, such as own use, to end an open-ended tenancy.

Key dates

• 31 July: Income tax return for the previous year (later with a tax adviser)
• Usually 15 February, May, August and November: Property tax instalments
• Within 12 months of the billing year ending: Service charge statement (Nebenkostenabrechnung) to tenants

Questions landlords ask

What is a good rental yield in Germany?

Gross yields of 3–4% are common in Munich, Berlin and Hamburg and 4–6% in smaller cities. With transfer tax and fees of up to about 10% of the price, check the net figure in the rental yield calculator for Germany.

Can foreigners buy property in Germany?

Yes, with no restrictions and no extra tax. Non-residents pay German tax on rental profit and file a German return each year.

Which expenses can I claim against rental income in Germany?

Loan interest, property tax, insurance, service charges you can't pass on, repairs, depreciation of the building at 2% or 3% a year, and costs of letting such as agent fees and accounting.

What does the rent brake mean for landlords in Germany?

In designated tight markets, a new tenancy's rent may be at most 10% above the local comparative rent, with exceptions for new buildings. It has been extended to the end of 2029.

Official sources

• Federal Ministry of Finance
• Federal Ministry of Justice (tenancy law)
• Federal Central Tax Office