What are closing costs in Germany?

Typically 5.0–12.1% of the price on a $300,000 purchase.

Buying property in Germany as an American

Q: How is rental income taxed in Germany?

German income tax for non-residents (limited tax liability): Non-residents file a German return. Under §50 EStG the basic allowance is added back, so tax starts at 14% on the first euro of rent and rises to 42%–45% (bands shown in USD are averaged from the 2026 tariff). Building depreciation is 2% a year (2.5% before 1925, 3% from 2023, optional 5% declining-balance for new builds started Oct 2023–Sep 2029); interest and running costs are deductible. The 5.5% solidarity surcharge applies only when German income tax exceeds €20,350 (2026), so rent alone rarely triggers it. Part of the building charges (Hausgeld) is passed on to tenants. US–Germany tax treaty in force; German tax on German rent is creditable against US tax.

Germany is a renters' country with stable, long-term tenants and strict tenant protection. Yields are low in the big cities and purchase costs add 7–12%, but a property held for more than 10 years can be sold free of German capital gains tax.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Key numbers

Gross rental yield

3.0–5.0%

Closing costs

5.0–12.1%

On a $300,000 purchase

Tax on rent (net basis)

22%–45%

German income tax for non-residents (limited tax liability)

Entry prices from

$200,000

8–12 weeks to close

Can Americans buy?

Allowed

No restrictions on US buyers. The purchase contract must be notarised and the buyer is entered in the land register (Grundbuch).

Owning property gives no residency right. Long stays need a residence permit (work, freelance, family or self-funded).

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: Bundeszentralamt für Steuern (Germany); US Department of State – country information

How rent is taxed

Non-residents file a German return. Under §50 EStG the basic allowance is added back, so tax starts at 14% on the first euro of rent and rises to 42%–45% (bands shown in USD are averaged from the 2026 tariff). Building depreciation is 2% a year (2.5% before 1925, 3% from 2023, optional 5% declining-balance for new builds started Oct 2023–Sep 2029); interest and running costs are deductible. The 5.5% solidarity surcharge applies only when German income tax exceeds €20,350 (2026), so rent alone rarely triggers it. Part of the building charges (Hausgeld) is passed on to tenants.

US–Germany tax treaty in force; German tax on German rent is creditable against US tax.

As a US taxpayer you also report the rent on Schedule E. Your free ranking estimates the combined effect for your state and income.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: Bundeszentralamt für Steuern (Germany); PwC Worldwide Tax Summaries; IRS – United States income tax treaties

Main risk

Rent caps (Mietpreisbremse) limit new rents in most large cities.

Berlin, Munich, Hamburg, Frankfurt and (since 2024) Leipzig restrict short stays: permits are needed beyond 8 weeks a year (Munich, Frankfurt) or 12 weeks (Leipzig), and whole-apartment holiday lets are largely banned in Berlin.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: US Department of State – country information; Global Property Guide (yields, transaction costs)

Cities we cover

Berlin$6,160/m² · gross 3.3%
Munich$9,520/m² · gross 3.2%
Leipzig$3,360/m² · gross 4.2%
Frankfurt$6,720/m² · gross 3.8%

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