2026-10-10 11:56

Can foreigners buy property in Germany?

Yes: German civil law places no restriction on buying real estate by nationality or residence, and in 2025 foreign buyers accounted for 44% of investment in German commercial real estate. A foreigner acquires property exactly as a German citizen does — by notarial contract and registration in the land register (Grundbuch). The limits come not from the passport but from EU sanctions, anti-money-laundering rules and, for agricultural land, a separate permit.

German law does not distinguish domestic from foreign buyers

A contract to buy land must be notarised (§ 311b(1) BGB). Ownership passes by conveyance (Auflassung), declared before a notary, and registration in the land register (§§ 873, 925 BGB). None of these provisions asks about nationality or a residence permit, and the law requires no special permit for foreigners (see Part 8 of the series German Prime Retail).

Foreign buyers are not the exception but almost half the market. In 2025 they accounted for 44% of investment in German commercial real estate, and for 51% in the segment of food stores and large-format specialist stores. In 2026 their activity in retail property weakened: in the first nine months, the foreign share there fell to 31% (BNP Paribas Real Estate).

The limits concern money, sanctions and special categories of land

Exhibit 1. Sanctions status and the source of funds, not the passport, limit a foreign buyer

Rule	Who is affected	What it means
EU sanctions (Regulation No 269/2014)	Listed persons of any nationality	Assets are frozen: the property cannot be bought, sold, let or mortgaged
Cash ban (§ 16a GwG)	All buyers under contracts concluded from 1 April 2023	Non-cash payment only: cash, crypto-assets, gold, platinum and gemstones are prohibited
Transparency Register (Transparenzregister), § 20 GwG	Foreign buying companies	Beneficial owners are registered before the deal unless they are in another EU member state's register; otherwise the notary must refuse to record the deed
Enhanced due diligence (§ 15 GwG)	Residents of countries on the EU list of high-risk third countries — since 29 January 2026 including Russia	Information on the source of funds and wealth; approval by the senior management of the institution carrying out the checks
Investment screening (§§ 55, 56 AWV)	Buyers from outside the EU acquiring 25% or more of the voting rights in a German company or all its essential assets	The Ministry of Economic Affairs may review the deal; for a company that only lets a supermarket, this is rare

A permit under the Land Transactions Act (GrdstVG) is required only for sales of agricultural and forestry land — for any buyer, German or foreign (§§ 1, 2 GrdstVG); it does not apply to stores.

The procedure is the same for foreigners, but the paperwork is heavier

The notary, the broker and the bank each identify the parties and their beneficial owners independently (§§ 10, 11 GwG). If the checks cannot be completed, the transaction does not go ahead (§ 10(9) GwG).

If you cannot travel, a representative signs. The land registry will accept the representative's authority only if the signature on the power of attorney is certified by a notary or a German consulate (§ 29 GBO), with an apostille or legalisation depending on the country. If your German is not sufficient, the deed is translated for you (§ 16 BeurkG).

After the purchase, non-residents too pay German tax on rental income (§ 49(1) no. 6 EStG). How much depends on whether you hold the property personally, through a German limited-liability company (GmbH) or through a foreign company — a fork best settled before signing (Part 9).

Implications for investors

1. Check the sanctions status of every party, not their nationality. A listed person of any nationality may not buy, sell, let or mortgage property, so the broker, the notary and the bank screen both the buyer and the seller against the EU list.

2. Prepare the source-of-funds documents before the letter of intent. The notary, the broker and the bank each check the beneficial owners independently, and if the checks cannot be completed, the transaction does not go ahead.

3. Settle the ownership structure before signing. Whether you hold the property personally, through a GmbH or through a foreign company determines the tax on rental income, which non-residents pay too. A foreign buying company also needs an entry in the Transparency Register unless its beneficial owners are in another EU member state's register.

What to check:
• whether you, your company, the seller or their beneficial owners appear on the EU sanctions list — the broker, the notary and the bank will check;
• documents on the source of funds — before the letter of intent, not on the eve of the notary appointment;
• an entry in the Transparency Register if a foreign company is buying;
• a power of attorney in the form required by § 29 GBO, with an apostille or legalisation, if you will not attend in person;
• when buying shares in a German company, screening under §§ 55, 56 AWV and the real estate transfer tax rules for share deals.

Sources: §§ 311b, 873, 925 BGB; § 29 GBO; § 16 BeurkG; §§ 10, 11, 15, 16a, 20 GwG; §§ 55, 56 AWV; §§ 1, 2 GrdstVG; § 49(1) no. 6 EStG; Council Regulation (EU) No 269/2014; Commission Delegated Regulation (EU) 2026/46; BNP Paribas Real Estate, investment market Germany and retail investment market Germany, Q4 2025 and Q3 2026. 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