Property dictionary
Every key term around real estate, financing and law, explained clearly with worked examples and matching tools.
Auflassungsvormerkung (German for 'conveyance priority notice', i.e. a priority notice of conveyance) is a protective entry in Section II of the German land register (Grundbuch). It secures the buyer's claim to ownership between signing the purchase contract and the final transfer of title, guarding against fraud or a double sale.
Grundbuch (German for 'land book', i.e. the land register) is the official public record kept at the local court (Grundbuchamt) that documents every plot in its district along with its owners, encumbrances, and mortgages. It is split into three sections and acts as the legal proof of ownership for property in Germany.
Grunderwerbsteuer (German for 'land acquisition tax', i.e. real estate transfer tax) is a one-time tax due when you buy a property or plot of land in Germany. Depending on the federal state (Bundesland), it runs from 3.5% to 6.5% of the purchase price.
Kaufnebenkosten (German for incidental purchase costs, i.e. the closing costs) are all the costs you pay on top of the purchase price when buying property in Germany. They cover real estate transfer tax, notary and land-registry fees, and any agent commission, and add up to 7 to 15% of the purchase price.
Maklerprovision (German for estate agent commission, the broker fee) is the payment an estate agent receives for successfully brokering a property. When buying apartments and single-family homes in Germany, it has usually been split equally between buyer and seller since December 2020.
Notarkosten (German for notary fees) are the legally fixed charges for notarizing a property purchase contract in Germany. Together with land-registry fees, they come to about 1.5% to 2.0% of the purchase price.
Annuität (German for annuity) is the fixed total instalment on an Annuitätendarlehen (annuity loan), made up of an interest portion and a principal repayment portion. As you pay the loan down, the interest share of each instalment falls and the repayment share rises, while the total instalment stays the same.
Beleihungswert (German for mortgage lending value) is the value a bank assigns to a property as a durable, long-term security for a loan. It usually sits 10 to 30 percent below the current market or purchase price and largely determines how favourable the interest rate on a German property loan turns out.
Eigenkapital (German for own capital, i.e. equity or down payment) is the share of the purchase price you pay from your own funds rather than borrowing from a bank. In Germany, lenders expect at least 20 to 30% of the price plus the closing costs, since a higher equity ratio (Eigenkapitalquote) earns noticeably lower interest rates.
Sollzinsbindung (German for 'fixed-interest commitment', i.e. the fixed-interest or rate lock-in period) is the contractually agreed span during which the interest rate on a German property loan cannot change. Typical terms are 10, 15 or 20 years.
Sondertilgung (German for 'special repayment', i.e. an overpayment) is an unscheduled, extra payment on a German mortgage that goes beyond your regular monthly instalment. It reduces the outstanding balance directly, which shortens the term and lowers your total interest costs.
Tilgung (German for loan repayment, i.e. amortisation) is the principal portion of each mortgage instalment that actually reduces your debt, separate from the interest. In Germany, the initial repayment rate (Tilgungssatz) is usually set at 2% to 3%.
Wohnfläche (German for 'living area', i.e. living space) is the legally defined habitable floor area of a home in Germany, measured in square metres under the Wohnflächenverordnung (WoFlV). It sets the rent, the purchase price, and how service charges are split.
Wohnflächenverordnung (German for Living Space Ordinance, abbreviated WoFlV) is the German regulation that defines how the living area (Wohnfläche) of a home is measured. It sets which areas count at 100%, 50%, 25%, or not at all, and has applied since 1 January 2004.
The Grundbesitzwert is the value the German tax office uses for a property in inheritance and gift tax. It is set under the Valuation Act using the comparison, income or cost approach and, since 2023, is usually close to market value.
Nießbrauch is the German usufruct (§ 1030 BGB): the right to use a property and keep its income while someone else owns it. The holder may live there or let it and keep the rent.
Pflichtteilsergänzung (§ 2325 BGB) protects heirs entitled to a compulsory share in Germany from an estate being reduced by lifetime gifts. Gifts in the ten years before death are added back to the estate, one tenth less for each year.
Schenkungsteuer is German gift tax on gifts made during a person's lifetime. It follows the Inheritance and Gift Tax Act (ErbStG) and is only due if the value of the gift exceeds the recipient's personal allowance.
The Vervielfältiger (multiplier) is the factor used to convert the annual value of a lifelong right, such as a usufruct or right of residence, into a capital value (§ 14 BewG). The German Federal Ministry of Finance publishes it every year by age and sex.
Wohnrecht is the German right of residence (§ 1093 BGB). It lets a person live in a building or part of it while someone else owns it. Unlike a usufruct, the holder may not let the rooms.
Under § 14 ErbStG all acquisitions from the same person within ten years are added together. The personal allowance therefore applies only once per ten-year period and is fully available again afterwards.
The Bio-Treppe (German for 'bio-ladder', § 43 GModG) requires any gas, oil or LPG heating newly installed in an existing German building after 29 July 2026 to produce a rising share of its heat from biomethane, bio-oil, biogenic LPG or hydrogen: 10% from 2029, 15% from 2030, 30% from 2035 and 60% from 2040.
The CO₂-Kostenaufteilung (German for CO₂ cost allocation) sets how landlords and tenants in Germany share the CO₂ price on heating oil, natural gas and coal. Under the CO2KostAufG, the worse the building, the higher the landlord's share, up to 95 %.
The Einkommensbonus (German for income bonus) is a top-up to Germany's KfW heating grant (programme 458) for owner-occupiers on lower incomes: 40 percentage points up to €30,000, 30 points up to €40,000 and 10 points up to €50,000 of taxable annual household income.
The Gebäudemodernisierungsgesetz (GModG, German for 'Building Modernisation Act') has governed the energy requirements for buildings in Germany since 29 July 2026. It replaces the Building Energy Act (Gebäudeenergiegesetz, GEG): the 65% renewables obligation when replacing a heating system and the replacement obligation for old boilers are gone, while new gas and oil heating systems face a 'bio-ladder' (Bio-Treppe) from 2029.
The Jahresarbeitszahl (JAZ, German for seasonal performance factor or SPF) states how many kilowatt hours of heat a heat pump produces from one kilowatt hour of electricity over a whole year. A JAZ of 3.5 means 1 kWh of electricity gives 3.5 kWh of heat.
The Klimageschwindigkeitsbonus (German for climate speed bonus) is a top-up to Germany's KfW heating grant (programme 458) for owner-occupiers who replace a working fossil heating system early. It is 16 percentage points for applications by 31 January 2027 and falls every six months to zero from 1 August 2028.
The Vorlauftemperatur (German for flow temperature) is the temperature at which heating water flows from the heating system to the radiators or underfloor heating. The lower it can be, the more efficiently a heat pump runs.
Bruttomietrendite (German for gross rental yield) expresses the annual cold rent (Kaltmiete) as a percentage of a property's purchase price. It works as a first indicator of an investment's profitability, but it ignores ongoing costs such as maintenance, management, and closing costs.
Kaufpreisfaktor (German for purchase price multiple, also called Vervielfältiger) is the price-to-rent ratio: the number of annual net cold rents it takes to cover a property's purchase price. It is the inverse of the gross rental yield, so the lower the factor, the better the ratio of purchase price to rental income.
Nettomietrendite (German for net rental yield) is the share of your total investment (purchase price plus closing costs) that remains as annual rental income after non-recoverable costs are deducted. It is more meaningful than the Bruttomietrendite (gross rental yield) because it accounts for management costs and maintenance reserves.