2026-10-10 11:58

Can a Russian citizen buy property in Germany?

Yes, unless the buyer is on the EU sanctions list: Regulation (EU) No 833/2014 contains no general ban on Russian citizens buying property in Germany. But the transaction passes three filters: a deposit limit of €100,000 per bank for Russian citizens and residents without a residence permit in the EU, the EEA or Switzerland; enhanced checks on the source of funds for residents of Russia; and German tax rules for "non-cooperative" jurisdictions.

The outright ban applies to listed persons, not to a passport

Persons listed in Annex I to Regulation (EU) No 269/2014 face a complete ban: all their funds and economic resources are frozen, and making funds or resources available to them, directly or indirectly, is prohibited (Article 2). Real estate is an economic resource too, and freezing means it may not be sold, let or mortgaged (Article 1). Broker, notary and bank therefore screen the buyer, the seller, the lenders and all beneficial owners against the consolidated list. The list changes often: the latest consolidated version is dated 7 August 2026.

Regulation (EU) No 833/2014 prohibits participating in activities whose object or effect is to circumvent its prohibitions, including where a participant merely accepts that outcome as possible (Article 12). Within the EU, no one may provide legal advisory, accounting, auditing or tax consulting services — or a range of other professional services — to companies established in Russia; the exceptions are narrow (Article 5n).

The deposit limit turns on citizenship and residence permits, not deal size

EU banks may not accept deposits from Russian citizens and persons residing in Russia if their deposits at one bank exceed €100,000 (Article 5b(1)). The same rule applies to companies established in Russia and to companies outside the EU more than 50% owned by Russian citizens or residents. The restriction does not apply to citizens of EU member states, EEA countries and Switzerland, or to holders of a temporary or permanent residence permit in those countries (Article 5b(3)). Exceptions are possible only with authorisation from the competent authority and only for the purposes listed in Article 5c — from basic needs to paying for legal services; investment is not among them. A similar limit applies to Belarusian citizens and residents (Article 1u of Regulation (EC) No 765/2006).

Exhibit 1. Restrictions depend on sanctions status, residence permit and tax residence, not on the passport

Buyer	Buying property	Deposits at an EU bank	Interest on a shareholder loan from a German GmbH
Listed person	Not possible	Frozen	Subject to the freeze
Russian citizen without a residence permit in the EU, EEA or Switzerland	Possible	No more than €100,000 at one bank	If resident in Russia, 15% withholding tax (15.825% with the solidarity surcharge)
Russian citizen with a residence permit in the EU, EEA or Switzerland	Possible	The Article 5b limit does not apply	Tax depends on the country of tax residence

Source of funds faces enhanced checks, and the tax treaty offers no shelter

Since 29 January 2026, Russia has been on the EU list of high-risk third countries (Commission Delegated Regulation (EU) 2026/46). For transactions involving residents of Russia, German law requires enhanced due diligence (§ 15(3) no. 2, (5) GwG). The institution carrying out the checks needs additional information on the client and the beneficial owner, the source of their funds and wealth and the purpose of the transaction, as well as its senior management's approval. If the checks cannot be completed, the transaction does not go ahead (§ 10(9) GwG). Cash, crypto-assets, gold, platinum and gemstones are prohibited as payment for all buyers (§ 16a GwG).

Tax consequences follow residence, not the passport. Since 20 December 2023, Russia has been on the German tax-haven list (StAbwV). Interest that a German limited-liability company (GmbH) pays to a lender resident in Russia bears withholding tax at 15% (15.825% with the solidarity surcharge) under § 10 StAbwG. The double tax treaty does not limit the German tax (§ 1(3) StAbwG). From 1 January 2027, Germany suspends the treaty in full (see Part 9 of the series German Prime Retail).

Implications for investors

1. Start with screening against the consolidated sanctions list. Every party to the deal and every beneficial owner goes through it, and the check must be repeated on the signing date: the list changes often.

2. Map the route of the money before the letter of intent. Establish whether the €100,000-per-bank deposit limit applies to you, and assemble a complete file on the source of funds: residents of Russia face enhanced checks, and if they cannot be completed, the transaction does not go ahead.

3. Calculate the tax on interest before funding the GmbH with a shareholder loan. If the lender is resident in Russia, the interest bears withholding tax at 15% (15.825% with the solidarity surcharge), and the double tax treaty does not limit it.

What to check:
• screening against the EU consolidated sanctions list — for the buyer, the seller, the lending bank and all beneficial owners;
• a document proving the Article 5b(3) exception: a passport of an EU or EEA state or of Switzerland, or a residence permit there;
• a complete file on the source of funds and wealth — before the letter of intent;
• the lender's tax residence, if the GmbH is funded by a shareholder loan;
• the current consolidated version of both regulations on the signing date.

Sources: Council Regulation (EU) No 833/2014, Articles 5b, 5c, 5n, 12 (consolidated version of 24 July 2026); Council Regulation (EU) No 269/2014, Articles 1, 2 (consolidated version of 7 August 2026); Council Regulation (EC) No 765/2006, Article 1u; Commission Delegated Regulation (EU) 2026/46; §§ 10, 15, 16a GwG; §§ 1, 10 StAbwG; § 2 StAbwV; BGBl. 2026 II No. 150; the series German Prime Retail, Part 9. Legal position as of 10 October 2026.

Photo: Jan-Philipp Thiele / Unsplash

This page is general information and not investment, legal or tax advice.

Ilya Gordon