German Property GlossaryKey Terms Explained Clearly

A

Abgeschlossenheitsbescheinigung (certificate of self-containment): Confirmation from the building authority that a residential unit is structurally separate from the other units and can be used independently. A prerequisite for creating flat ownership.

AfA – Absetzung für Abnutzung (depreciation): Tax depreciation of the building portion of let properties. For buildings constructed before 1925: 2.5% per year; 1925 to 2022: 2%; new builds from 2023: 3%. → Depreciation on property

Alleinauftrag (sole agency agreement): An agency agreement under which the owner instructs only one agent for a set period. In return, the agent undertakes to market the property actively.

Anschaffungsnahe Herstellungskosten (acquisition-related production costs): Renovation costs in the first three years after purchase that exceed 15% of the building's acquisition costs. For tax purposes, they can only be deducted via depreciation.

Annuitätendarlehen (annuity loan): A loan with a constant monthly instalment made up of interest and repayment. Over time, the interest portion falls and the repayment portion rises. → Financing guide

Auflassung (conveyance): The agreement between seller and buyer on the transfer of ownership, declared before the notary. The basis for the buyer's later entry in the land register.

Auflassungsvormerkung (priority notice of conveyance): An entry in the land register that protects the buyer after notarisation. Once it is registered, the seller can no longer sell or encumber the property elsewhere. → The land register explained

Aufteilungsplan (division plan): A drawing showing how a building is divided into separate and common ownership. Part of the declaration of division.

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B

Baulast (public building encumbrance): A public-law obligation of a landowner towards the building authority, for example to tolerate setback areas. In most federal states it is entered in a register of building encumbrances (Baulastenverzeichnis). Bavaria has no register of building encumbrances; comparable obligations are usually secured here as an easement in the land register.

Bauträger (property developer): A company that builds houses or flats on its own land and sells them to buyers. The purchase price is paid in instalments according to construction progress (MaBV). → Property developers

Bebauungsplan (development plan): A municipal by-law that sets out what may be built on a plot and how – type and extent of use, number of storeys, roof shape, building lines.

Bedarfsausweis (demand-based energy certificate): An energy performance certificate that calculates energy demand from the construction and building services – independently of the occupants' behaviour.

Beleihungswert (mortgage lending value): The value a bank attributes to a property as long-term security for a loan. It is usually below the market value.

Bestellerprinzip (client-pays principle): When residential property is let, the agent is paid by whoever instructed them – usually the landlord.

Betriebskosten (operating costs): Running costs of a building that may be passed on to tenants under the Operating Costs Ordinance, such as property tax, water, waste and heating. → Service charge statement

Bodenrichtwert (standard land value): The average value of one square metre of undeveloped land in a zone, determined by the valuation committee. Available via BORIS Bayern. → Standard land values in Upper Franconia

Bruttorendite (gross yield): Annual basic rent divided by the purchase price, as a percentage. Does not take management costs into account. → Calculating rental yield

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D–E

Dienstbarkeit (easement): A right of a third party over a plot, entered in the land register – e.g. a right of way, a right to lay utility lines or a right of residence.

Due Diligence: Careful examination of a property before purchase – legal, technical, financial and tax-related. Customary above all for investment and commercial property.

Effektiver Jahreszins (annual percentage rate, APR): The interest rate of a loan including all costs. The only figure that allows loan offers to be compared properly.

Eigenbedarf (owner's own use): Grounds for terminating a tenancy when the landlord needs the flat for themselves, family members or members of their household. → Tenancy law

Energieausweis (energy performance certificate): A document stating the energy efficiency of a building. Mandatory when selling and re-letting. Two variants: demand-based certificate (calculated) and consumption-based certificate (measured). → Energy certificate

Erbbaurecht (hereditary building right): The right to build and use a building on someone else's land – in return for payment of ground rent (Erbbauzins). The land continues to belong to the grantor of the building right. → Hereditary building right

Erbengemeinschaft (community of heirs): Several heirs who jointly own the estate. They can only dispose of the property jointly. → Inheritance

Erhaltungsrücklage (maintenance reserve): A reserve held by an owners' association for future maintenance of the common property; formerly called Instandhaltungsrücklage.

Erschließung (site development / servicing): Connecting a plot to roads, water, sewage, electricity and telecommunications. Municipalities levy development contributions for initial servicing. → Site development

Ertragswertverfahren (income capitalisation method): A valuation method that derives the value from sustainably achievable rental income. Standard for apartment buildings and commercial property. → Determining property value

Exposé (sales brochure): Sales document with photos, floor plans, description, location, mandatory information from the energy performance certificate and price. → Exposé service

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F–G

Fälligkeitsmitteilung (notice of due date): A letter from the notary to the buyer stating that all conditions have been met and the purchase price must be paid.

Flurstück (cadastral parcel): An area defined by surveying and recorded in the real estate cadastre. One plot can consist of several cadastral parcels.

Gebäudeenergiegesetz – GEG (Building Energy Act): The law setting requirements for heating, insulation and the energy performance certificate, colloquially known as the "heating law". → Heating law (GEG)

Gemeinschaftseigentum (common property): All parts of a residential complex that do not belong to separate ownership: load-bearing walls, roof, façade, stairwell, lift, heating system, outdoor areas.

Grundbuch (land register): A public register kept by the local court that documents ownership of and encumbrances on plots. Three sections: I (owners), II (encumbrances and restrictions), III (mortgages and land charges).

Grunderwerbsteuer (land transfer tax): Tax on the purchase of land and property. In Bavaria: 3.5%. → Land transfer tax in Bavaria

Grundschuld (land charge): An encumbrance on a plot to secure a loan, entered in section III. It remains after repayment until it is deleted.

Grundsteuer (property tax): An annual municipal tax on real estate. In Bavaria, it has been calculated using an area model since 2025.

Gutachterausschuss (valuation committee): An independent body at the districts and independent cities that collects purchase prices, determines standard land values and prepares valuation reports.

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H–K

Halbteilungsprinzip (equal-split principle): Since the end of 2020, buyer and seller have borne the agent's commission in equal parts when consumers buy flats and single-family houses. → Agent's commission in Bavaria

Hausgeld (service charge for flat owners): The monthly advance payment made by flat owners for operating costs, administration and the maintenance reserve. Not the same as the service charge statement issued to the tenant. → Flats, owners' associations and service charges

Heimfall (reversion): The return of a hereditary building right to the landowner in the event of serious breaches of contract, against compensation.

Indexmiete (index-linked rent): Rent that follows the development of the consumer price index. → Rent increases

iSFP – individueller Sanierungsfahrplan (individual renovation roadmap): A plan prepared by an energy consultant for the step-by-step renovation of a building; it increases certain subsidies. → Energy-efficient renovation

Kappungsgrenze (rent increase cap): The upper limit for rent increases up to the comparative rent: 20% in three years, 15% in tight housing markets.

Kaufnebenkosten (purchase costs): All costs incurred in addition to the purchase price: land transfer tax, notary, land register and, where applicable, the agent. → Purchase costs in Bavaria

Kaufpreisfaktor (purchase price multiple): Purchase price divided by annual net basic rent. Shows how many years' rent a buyer is paying.

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L–N

Leibrente (life annuity): A lifelong monthly payment in return for the sale of a property, usually combined with a right of residence. → Property annuity schemes

Liegenschaftszins (property yield rate): The rate of return the market applies to property; a key figure in the income capitalisation method. Derived by the valuation committees.

Löschungsbewilligung (consent to deletion): The bank's declaration that a land charge may be deleted – needed to transfer a plot free of encumbrances.

MaBV – Makler- und Bauträgerverordnung (Estate Agents and Developers Ordinance): Governs the obligations of agents and developers, including payment in instalments according to construction progress when buying from a developer.

Maklervertrag (agency agreement): A contract between the agent and the client on the scope of services, commission and term. For flats and single-family houses, it must be in text form. → Questions to ask an agent

Mietspiegel (rent index): An overview of the usual local comparative rents in a municipality. → Rent index for Upper Franconia

Modernisierungsumlage (modernisation levy): After a modernisation, landlords may add 8% of the costs to the annual rent, subject to a statutory cap.

Nettomietrendite (net rental yield): Rental yield after deducting non-recoverable costs and including purchase costs.

Nießbrauch (usufruct): The right to use a property and draw its income without being the owner. Common in transfers within the family. → Usufruct and right of residence

Notarielle Beurkundung (notarisation): The legally required form for property purchase contracts. The notary advises both sides impartially and handles completion. → Notary appointment

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O–R

Off-Market: A sale without a public listing, through registered buyers and investors. → Investor matching

Ortsübliche Vergleichsmiete (usual local comparative rent): The rent agreed or changed in the last six years for comparable housing in the municipality. The upper limit for rent increases in existing tenancies.

Reallast (real burden / rent charge): An obligation to make recurring payments or services, entered in the land register, such as an annuity or ground rent.

Restnutzungsdauer (remaining useful life): The number of years a building can be expected to remain in use with proper management. Important for valuation and depreciation.

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S–T

Sachwertverfahren (cost approach / asset value method): A valuation method that adds the land value and the construction costs of the buildings less age-related depreciation, and adjusts the result to the market.

Sale-and-Lease-Back: The sale of a business property to an investor, followed by leasing it back. → Sale and leaseback

Sondereigentum (separate ownership): The part of a building that belongs to an individual owner – typically the flat itself, with non-load-bearing interior walls, floors and sanitary fittings.

Sondernutzungsrecht (exclusive right of use): The right of a flat owner to use part of the common property alone, such as a garden or parking space.

Sonderumlage (special levy): A one-off payment by the flat owners for measures not covered by the reserve. It can amount to several thousand euros.

Spekulationssteuer (speculation tax): Colloquial term for the income tax on the gain from selling a property within the ten-year period (§ 23 EStG). Does not apply in the case of owner-occupation. → Speculation tax

Staffelmiete (graduated rent): Rent increases set out in the tenancy agreement and staggered over time.

Teilungserklärung (declaration of division): A notarised document that divides a building into separate and common ownership and sets out the rights and obligations of the owners.

Teilungsversteigerung (partition auction): A compulsory auction to dissolve a community of owners, for example between heirs or spouses who are in dispute. Usually the least favourable solution. → Property in a divorce

Teilverkauf (partial sale): The sale of a share of one's own property to a provider, with a lifelong right of use in return for a usage fee.

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U–W

Unbedenklichkeitsbescheinigung (clearance certificate): Confirmation from the tax office that the land transfer tax has been paid. Without it, ownership is not transferred in the land register.

Verbrauchsausweis (consumption-based energy certificate): An energy performance certificate based on the actual energy consumption of the last three years.

Vergleichswertverfahren (sales comparison method): A valuation method that derives the value from prices actually paid for comparable properties. Standard for flats and typical houses.

Verkehrswert (market value): The price that could be achieved in a sale under normal market conditions (§ 194 BauGB). Can be determined by an expert valuation report.

Vorfälligkeitsentschädigung (early repayment penalty): Compensation the bank may demand if a fixed-rate loan is repaid before the end of the fixed-interest period – for example on a sale.

Vorkaufsrecht (right of first refusal / pre-emption right): A statutory or contractual right to step into a concluded purchase contract on the same terms. → Right of first refusal

WALT (weighted average lease term): The weighted average remaining term of the leases of a commercial property. → Valuing commercial property

WEG – Wohnungseigentümergemeinschaft (owners' association): The community of all owners of a building divided into flat ownership. Decisions are taken at the owners' meeting.

Wohnflächenverordnung – WoFlV (Living Space Ordinance): The basis for calculating living area. Balconies and terraces generally count at 25%, areas with a ceiling height below 1 m not at all, and those between 1 and 2 m at half.

Wohnrecht (right of residence): The right to live in a flat or house oneself without being the owner; unlike usufruct, it does not include the right to let the property.

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Z

Zinsbindung (fixed-interest period): The period for which the interest rate of a loan is fixed. After ten years, any fixed-rate loan can be terminated with six months' notice.

Zugewinnausgleich (equalisation of accrued gains): The equalisation of the increase in assets achieved during the marriage on divorce; properties are included at their market value.

Zwangsvollstreckungsunterwerfung (submission to immediate enforcement): A clause in the purchase contract by which the buyer submits to immediate enforcement in respect of the purchase price – customary, and a protection for the seller.

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This glossary is regularly expanded. Is a term missing? Write to us.

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