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.
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.