• What happens when a tenant moves out?
    The property management company will find a replacement tenant.
    This will give you the opportunity to increase the rent.
     
  • Who will look after the property management?
    This can be done by the owner himself or alternatively an assistant manager can be appointed to look after the investor's interests in Germany.
     
  • Capital appreciation
    The industrial and political reforms, which are ongoing in Germany, is leading to a continuous uplift in property prices.
     
  • Dual Tax Agreement
    Due to the Dual tax agreement, which is in place between Germany and Ireland, investors will not have to pay tax twice. They will receive a tax credit for any tax paid in Germany.
     
  • How do index rents work and how does it affect my investment?
    For residential there is no index linked rent.
     
  • Capital gains tax situation.
    Currently gains are tax on an income tax basis on a sliding scale. It is predicted that in 2007/2008 the tax rate will be reduced to 20%. If an investor sells after a period of 10 years they will be exempt in CGT in Germany and will only pay Irish CGT.
     
  • Who manages the property?
    A property management company will already be in place for each building. It is the purchasers choice if they wish to retain the same management company or appoint a new company.
     
  • How much do banks lend?
    The banks in Germany differ from Irish banks in that the lending is largely based on the building rather than the purchasers financial position, although this does have bearing. Lending ranges from 50% - 80%.
     
  • What are the cost associated with Purchase?
    Costs for purchasing would typically be:
    Real Estate Transfer Tax (Stamp Duty) - 4.5%
    Agent fee - 5%
    Notary Fee - 1% - 1,5 %
     
  • How do rents increase?
    There are legal restrictions on rent increases. In general it is possible to increase rents up to 20% within three years. Rents can only be increased once every 15 months. Additional rent increases can be imposed in the case of building modernization. You can agree rises for up to the next 10 years or where applicable use the rent table or another process is to find 3 comparable apartments with higher rents in the neighbourhood.