Chapter 6 A Look at Germany

Europe & International Real Estate Slide 6-1

Chap

ter 6

A Lo

ok a

t Ger

man

y


Geo

grap

hy


Länd

er


Modern State of Germany

Old cities, towns, villages

New country—I871

History entwined with other European countries

1945—split East and West

1990—united


Logistics Center of Europe

Major (3rd) economic sector

60,000 logistic companies , 8% of workforce and GDP

Seaports, roads, railways, freight hubs, inland waterways North Sea to Black Sea


Unified, still Divided?

Dismantling socialist system, fostering capitalism, democracy Privatizing property and

restarting private enterprise—Treuhand

Unemployment and migration

Solidarity tax Wall in the mind—Ossi

and Wessi, Ostalgie


German Economy


No federal or state licensing

Immobilienverband Deutschland (IVD)

Merger of Ring Deutscher Makler (RDM) and Verband Deutscher Makler (VDM)

Membership requires qualification exam and proof of professional liability insurance

Real Estate Professionals


Once-in-a-lifetime event, extended search Makler conveys the offer to the seller Notar prepares purchase contract Buyer must demonstrate ability to pay Priority notice in land register Signing ceremony, funds placed in notar’s account Notar applies for registration in Grunbuch Seller receives payment when registration complete

—about 40 days

Real Estate Transactions


Germany: Nation of Renters

Lowest homeownership rate in the EU—only 40%

Post-War housing shortage

“Once a renter always a renter”

Low market turnover

Scarce , expensive land

High down payments


Germany: Pro Tenant

Rental laws favor tenant

Maximum 3 months’ deposit

Controls on rent increases

Landlord pays utilities

3–9 months notice to remove a tenant

Tenant can refuse if undue hardship


Five cities contain most Class A space Berlin, Hamburg, Düsseldorf, Frankfurt, Munich

Administrative centers Bonn, Münster, and Wiesbaden

Essen Information and technology, healthcare, insurance

companies, corporate headquarters East lags behind West, except Berlin Risk-averse and conservative investors

Commercial Real Estate


Web Sites

www.deutschland.de

www.bundesbank.de

www.destatis.de

www.germany-re.com

www.invest-in-germany.de

www.german-business-portal.info

www.dihlc.de

www.bfai.de


No trial by jury Courts of Justice

Federal, Regional, Local Criminal, Civil, Family cases

Specialized Courts Administrative Finance Labor Social

Judicial System


Basic Law : constitution established 1949 President: head of state Chancellor: head of government Bundestag Bundesrat State (Länder) Municipal (Gemeinden)

Government


Tax residency: 183+ days over 2 years Income tax: nonresident foreigners 25 – 45% Solidarity tax: 5.5% surcharge on income tax, paid

by West Germans VAT: 19% Capital gains tax: none on real estate owned 10+

years Rental Income: 25% for non EU citizens Television License: €17monthly fee

Taxes-Taxes-Taxes


Help desk: www.germantaxes.info


Beyond the Basics

Masters of planning Values: order, structure,

stability, discipline, responsibility, punctuality

Straightforward Personal relationship not

needed for business Separate business and

personal life Great pride in their homes

Chapter 6 A Look at Germany

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