Renting versus buying in Germany
Grunderwerbsteuer is set by each Land under section 11 GrEStG, and the spread is wide enough to change the answer: 3.5% in Bayern against 6.5% in four Länder, with Bremen last moving on 1 July 2025. Pick your Bundesland above. The headline 5% is only a placeholder for an unrecognised region and matches no actual Land.
The other buying costs are unusually heavy too, at about 3.5%. Roughly 2% is notary and land registry, both compulsory, a German purchase is not valid without a notary, and the rest is the buyer's share of the estate agent commission, which has been split with the seller since 2020. Before that reform the buyer commonly carried all of it.
Taken together, entry costs of 7% to 10% of the price are normal in Germany, and they are the single biggest reason German break-even years are long. Nothing about the mortgage rate rescues a two- or three-year purchase here.
Rents pull in the same direction. Rents on existing tenancies are held down by the Mietpreisbremse and by local rent indexes, so rent growth defaults to 2% while house prices default to 3%. A sitting tenant in Germany is protected in a way that a tenant in Ireland or New Zealand is not, and that protection is worth real money on the renting side of this comparison.
Grundsteuer was reformed in 2025 and is now a formula on an assessed value times a municipal multiplier. About 0.15% of market value is a common outcome, but it varies widely by municipality.