Buying foreign real estate
Be it as a holiday home, retirement home or capital investment – buying a property abroad can bring many advantages. But what do you need to consider? From legal framework conditions to required documentation, there are a few hoops you have to jump through first. A structured overview will help guide you safely through the process.
Why buy a property abroad?
Buying a property abroad can bring many benefits: you have your own holiday home, an investment or even a future home for retirement. But to ensure that the dream does not turn into a nightmare, you should deal with the most important questions at an early stage. Laws and regulations are often very different from those in the your home country, and financing can also be quite the challenge.
To ensure that you are well prepared, you should clarify the following points in advance:
- Purpose of the property: Own use or rental?
- Financing: Equity, loans at home or abroad, ancillary costs
- Choice of location: Infrastructure, climate, rental potential
- Legal framework conditions: Are there any restrictions for foreign buyers?
- Documents: What documents need to be submitted and possibly translated?
What is there to consider?
Of course, you need a suitable location for your dream property abroad. Be it as a holiday home, retirement home or capital investment – the local environment determines whether or not your purchase turns out to be a good choice in the long term. In addition to personal preferences, you should also take infrastructure, climate and rental potential into consideration.
- Infrastructure: How good are the shopping facilities, restaurants and medical care? Are there good connections to airports or public transport?
- Climate & environment: Does the weather meet your expectations? Are there seasonal extremes such as heat, rainy seasons or natural disasters?
- Rental potential & demand: If you want to rent the property out, local rental prices, seasonality and legal requirements are important factors.
Tips for finding real estate
But where can you find the right property? A thorough search is important, because not every offer will be reputable. There are several ways to find suitable properties abroad:
Brokers: Local experts often have exclusive offers and know the legal framework. Look for reputable providers with good reviews.
Online platforms: Real estate portals offer an initial overview of prices and availability. Recommended sites are:
- Rightmove Overseas – worldwide property listings
- ImmobilienScout24 – listings in Germany and internationally
- Idealista – focus on Spain, Italy, Portugal
Buying a property abroad: here is how it works
The process of buying a property abroad is often different from buying one in your home country. Procedures differ from country to country, but some basic steps are the same almost everywhere.
Typical procedure
- Reservation & deposit: Many sellers or agents require a deposit to reserve the property. Important: check that the payment is legally secured.
- Purchase contract: As soon as the buyer and seller agree, a preliminary contract or, straightaway, the purchase contract is drawn up.
- Notarial appointment: In many countries, a notary is required to make the purchase legally binding and enter it in the land register.
- Transfer of ownership: After payment of the purchase price, the entry in the land register takes place, often accompanied by a tax payment.
Translations & certifications
Many documents have to be translated into German or the national language of the country of purchase and often certified. To avoid misunderstandings or delays, it is advisable to arrange professional translations from the outset. These include:
- Purchase contracts: Important clauses should be translated in a clear and legally watertight manner.
- Land register extracts: Proof of the rightful owner.
- Tax & regulatory documents: Depending on the country, it may be necessary to provide tax assessments, registration certificates or proof of identity.
Tips for a secure purchase
Buying real estate abroad brings opportunities but also risks. The following tips can help you avoid many problems:
- Take your time: Never let yourself be pressured, even if sellers or brokers claim that there are “many interested parties”. Always check several options.
- Seek independent advice: An experienced local lawyer or notary can help avoid legal problems. Ideally, the person should not be associated with the seller or broker.
- Check the land register and property rights: Before buying, you must ensure that the seller is actually the rightful owner and that there are no outstanding debts on the property.
- Understanding the contract: Never sign anything that you do not fully understand. A professional translation can prevent misunderstandings.
- Have all documents translated: Purchase contracts, land register extracts and official forms often need to be officially translated and certified so that they are legally valid.
With good preparation and the right experts at your side, buying real estate abroad will be safer and less stressful.
FAQs: Buying a property abroad
The cheapest properties abroad are often found in Eastern Europe (e.g. Bulgaria, Romania, Albania) as well as in parts of South America and Asia. Rural regions or economically weaker countries in particular offer low prices. However, be aware of local property rights, taxes and ancillary purchase costs.
Several German banks finance foreign real estate, including BW-Bank (Spain, Portugal, France) and some Sparkasse banks. A German property is often required as collateral. Alternatively, financing via foreign banks is possible. A comparison of the conditions is recommended.
Foreign real estate is subject to the taxes of the respective country, usually property tax and income tax on rental income. In Germany, the double taxation agreement applies, which means that income is often only taxed abroad. Sales proceeds may be taxable depending on the holding period. Tax advice is recommended.
Several German banks, such as BW-Bank and some Sparkasse banks, finance foreign real estate. A German property is often required as collateral. Alternatively, foreign banks offer loans, usually with local conditions. Currency risks and interest rates should be compared. Advice is recommended.
Author
Jasmine Chegaing, Content Writer
Jasmine joined lingoking as a working student in November of 2024. She supports the content marketing team with its SEO strategy and writes for the lingoking guide and other media. Her motto: “The most radical thing you can do is be yourself.”
Translation
Dr. Tracey Kimmeskamp
A native of Northern Ireland, Tracey has lived in Germany’s Ruhrgebiet for over 20 years. She has been working with lingoking as a translator since 2016, all the while diligently training for her dream career in mochi quality control.
