Are you dreaming of your own home and considering buying land? This step lays the foundation for your future home, but it also involves complexities ranging from site selection to legal pitfalls. Learn here how to avoid common mistakes and plan the purchasing process wisely.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
The additional costs when purchasing building land can amount to up to 20% of the actual purchase price and need to be factored in early.
A thorough examination of the development plan, land register, and soil condition report is essential to determine buildability and clarify risks.
Secured financing and bank confirmation of financing are crucial before entering into purchase negotiations or signing a purchase agreement.
Purchasing land is often the first and most crucial step on the journey to owning your own home – a decision with far-reaching financial and personal implications. Given the rising land prices, which have increased by almost 90% since 2013, and the complexity of German building law, many buyers face significant challenges. How can you ensure that your dream plot is genuinely buildable and doesn't contain hidden costs? This article guides you through the entire process of buying land, from the initial research to the notary appointment, and shows you how to make informed decisions.
The Key Points Summarized
Additional Costs: Plan for an additional 10-20% of the purchase price for costs such as the property transfer tax (3.5%-6.5% depending on the federal state), notary and land registry fees (approximately 2%), as well as any potential brokerage fees (up to 7%).
Legal Check: Looking into the development plan, the land register, and obtaining a soil report (costs around €1,000-€2,500) are essential to clarify buildability and any legacy issues.
Financing: A solid financing confirmation from your bank is crucial before entering purchase negotiations; often, a down payment of 20-30% of the purchase price is recommended.
Development: Clarify whether the land is developed (connected to electricity, water, sewage, roads). Development costs can range from €10,000 to €40,000.
A professional Auctoa assessment or a chat with our ImmoGPT can help you accurately assess the value and potential of your desired plot.
Understanding the Basics: What Qualifies a Plot of Land as a Building Site?
Before you begin your search, it's crucial to understand the definition of building land. Not every available piece of land can be built upon. Building land, also known as building plots, refers to plots that are designated and suitable for development according to the Building Code (BauGB) and the respective state building regulations. This means that its use as building land must be defined in a land use plan or development plan.
There are different categories: Developed Land is already connected to utilities and can be built on immediately. In contrast, there is Raw Land, which is intended for development but has not yet secured connections. Another category is Land with Development Potential; here, future development is possible but not yet legally guaranteed—an investment with higher risk, as the rezoning process can take years or might never occur. Prices for agricultural land without any prospects for development are significantly lower, often below €50/m², while developed land in metropolitan areas like Munich can cost over €2,900/m². Understanding these differences is fundamental to avoid poor investments when purchasing building land.
Calculating Costs: Plan Your Budget Precisely for Land Purchase
The costs for purchasing building land go far beyond the actual plot price. Careful budgeting is essential. The additional costs can quickly amount to 10% to 20% of the purchase price. The main items include property transfer tax, which varies depending on the federal state, from 3.5% (e.g., Bavaria, Saxony) to 6.5% (e.g., Brandenburg, NRW) of the purchase price. Notary and land registry fees amount to approximately 1.5% to 2%.
If a real estate agent is involved, commissions often range from 3% to 7% of the purchase price (sometimes shared between buyer and seller). An often overlooked item is the development costs, if the property is not yet connected to the public network (electricity, water, sewage, road). These can vary between €10,000 and €40,000. A soil expert report to assess soil conditions and any possible contamination costs an additional €1,000 to €2,500. A detailed list of all potential expenses protects against financial bottlenecks. For a detailed analysis of land prices and additional costs, an Auctoa evaluation can be very helpful.
Typical additional costs for purchasing building land at a glance:
Property transfer tax: 3.5% - 6.5% of the purchase price
Notary and land registry costs: approx. 1.5% - 2% of the purchase price
Real estate agent commission (if applicable): 3% - 7% of the purchase price (often shared)
Development costs (if undeveloped): €10,000 - €40,000
Soil expert report: €1,000 - €2,500
Surveying costs (if necessary): €1,000 - €1,400
Building permit fees: approx. 0.5% of construction costs
These costs should definitely be included in your financial planning. Knowing these items precisely is the first step to a successful land acquisition.
Navigating Legal Challenges: Land Use Plan, Land Register, and Other Aspects
The purchase of land is associated with numerous legal aspects that are essential to examine. A key document is the local development plan of the municipality. It stipulates what, how, and where building is allowed on the property—for example, house type, number of storeys, roof design, and setback distances. You can access this information from the relevant building regulation or city planning office. Failing to comply with these requirements risks not obtaining a building permit.
Another crucial step is to review the land register extract. This provides information about ownership, registered encumbrances, and restrictions such as rights of way, pre-emptive rights, or land charges. A current extract should be no older than three months. Also, verify whether building encumbrances are recorded in the building encumbrance register that could restrict usage. A soil survey is also highly recommended to gain information about the ground's load-bearing capacity, the water table, and any potential contaminated land. The costs for this (approx. €1,000-2,500) are a good investment to avoid unpleasant surprises and high follow-up costs later. Some municipalities also impose deadlines for construction; ensure these align with your plans.
Optimising Property Search: Strategies for Finding Your Dream Plot
Searching for the ideal plot of land requires patience and a strategic approach. Start your search on online real estate portals like Immobilienscout24 or Immowelt. These offer a wide selection and filtering options by price, size, and location. Set up search alerts to be immediately informed about new listings. In addition, local newspapers may contain adverts that are not available online.
Another key point of contact is the municipal administrations. Many municipalities sell plots directly, often on more favourable terms, though sometimes with conditions such as a self-use requirement or for specific target groups (e.g., families). Actively inquire about designated building areas or planned development projects. Collaborating with a local real estate agent can also be beneficial. Agents often have market knowledge and networks that can give you access to plots not publicly advertised. However, clarify in advance the amount of the agent's commission, which can be up to 7% of the purchase price. Do not underestimate the value of local contacts and networks; sometimes this is how you learn about intentions to sell before a plot officially comes on the market. For an initial assessment of what to consider when buying land, our blog article can be helpful.
Securing Financing: The Path to a Loan for Your Building Land
A solid financing plan is crucial when purchasing land. Before entering serious negotiations, you should thoroughly review your financial capabilities and obtain a financing confirmation from your bank. This shows the seller your ability to pay and strengthens your negotiation position. Banks often recommend an equity ratio of 20% to 30% of the total purchase price (including additional costs). Plan for a financial buffer of about 10% for unforeseen expenses.
There are various types of loans available for land financing. An annuity loan with fixed interest rates and constant repayments is a common option. A variable loan, where the interest rates adjust periodically, can be advantageous when rates fall but also comes with risks when rates rise. Compare offers from different banks or use the services of an independent financial broker. Note that additional costs often need to be covered by equity, as they are not secured by the land's value itself. It's crucial to clarify the financing conditions early on, as withdrawing from the purchase contract due to a failed financing is generally not straightforward. Our ImmoGPT can answer initial questions about financing options.
Managing the Purchase Process: From Offer to Land Registry Entry
Once you have found your desired plot and clarified the financing, the actual purchase process begins. This is clearly regulated in Germany and requires the compulsory notarial certification of the purchase contract. Without a notary, the purchase contract is invalid. The notary acts as a neutral party, explains the rights and obligations to both parties, and ensures that the contract complies with the law.
The process usually unfolds as follows:
Negotiation and Agreement on Purchase Price: After you have obtained all relevant information about the plot (development plan, land register, soil survey), you negotiate the purchase price.
Drafting of the Purchase Contract: The notary prepares a draft of the purchase contract. Both parties typically have at least two weeks to review it and, if necessary, propose changes. Ensure that all important details such as purchase price, exact description of the plot, and payment terms are accurately recorded.
Notary Appointment: At the notary appointment, the contract is read aloud and signed by both parties in the presence of the notary. Bring your personal ID and tax identification number with you.
Preliminary Entry in the Land Register: After the signing, the notary usually arranges a preliminary entry in the land register to secure your claim to ownership until the final transfer.
Payment of Purchase Price: You transfer the purchase price according to the contractual agreements, often to a notary escrow account or directly to the seller, once all requirements are fulfilled (e.g., removal of old encumbrances).
Payment of Real Estate Transfer Tax: The tax office will request payment of the real estate transfer tax after notification by the notary. Upon receipt of payment, the tax office issues a clearance certificate.
Transfer of Ownership in the Land Register: With the presentation of the clearance certificate, the notary initiates the final registration as the new owner in the land register. Only then are you officially the owner. This entire process can take an average of four to six months. Careful preparation and knowledge of the key steps are crucial.
After you have overcome the hurdles of land acquisition, nothing stands in the way of planning your dream home.
bauland-kaufen
Purchasing land is a complex undertaking that requires thorough preparation and careful examination of numerous aspects. From initially defining your needs, to detailed cost calculations, essential legal checks, financing, and the final meeting with a notary – each step presents its own challenges. Additional costs can amount to up to 20% of the purchase price, and clarifying buildability through consultation of the development plan and land register is fundamental. A soil survey protects against unpleasant surprises underground, which can quickly result in costs exceeding €10,000. With a structured approach, seeking expert advice – for example, through an Auctoa evaluation or the Auctoa ImmoGPT – and solid financial planning, you can minimise the risks and successfully lay the foundation for your future home. Remember: Well planned is half built!
Additional useful links
The Statistische Bundesamt (Destatis) offers publications on land purchase values, providing important insights into price development.
The Deutsche Bundestag provides a PDF document addressing land prices and related topics.
The Bodenrichtwertinformationssystem (BORIS) offers a central platform for retrieving land value data in Germany, essential for property valuation.
The Leibniz Institute of Ecological Urban and Regional Development (IOER) publishes a results brochure on the land survey, delivering valuable data and analyses.
The KfW offers a credit market outlook containing indicators for the real estate and construction sectors, relevant for financial planning.
The Federal Institute for Building, Urban and Spatial Research (BBSR) provides a dashboard for the real estate market report, visualising current data and trends.
The Deutsche Bundesbank offers an indicator system for the residential property market, providing key figures on market development.
FAQ
What is the difference between land for construction and land awaiting development?
Building land (or land ready for construction) is already developed and can be built upon immediately in accordance with the development plan. Land designated for future development is an area where construction is expected in the future but is not yet legally secured; it is often not developed yet and there is no guarantee for a reclassification.
Why is a soil survey important when purchasing building land?
A soil survey (costing approximately €1,000-2,500) provides vital information about the load-bearing capacity of the soil, the groundwater level, and any potential contamination or pollutants. This helps to avoid unexpected costs and issues during construction.
Can I withdraw from the purchase contract for a plot of land?
After notarisation, withdrawing from a purchase contract is only possible in exceptional cases, such as in the event of fraudulently concealed defects or if a contractual right of withdrawal has been agreed. Usually, a failed financing is not a reason for withdrawal.
How long does the process of purchasing building land take?
The entire process from agreement to final registration of ownership in the land register can take an average of four to six months.
Who bears the development costs for a building plot?
If a property has not yet been fully developed, buyers usually bear the costs for connecting to public supply networks (electricity, water, sewage, roads). These can be considerable (€10,000 - €40,000).
What does the development plan say?
The development plan is a municipal bylaw that legally determines how properties may be built upon. It includes specifications for the type of building use (e.g., residential area), the extent of building use (e.g., floor space index), the building method (e.g., open or closed construction), and the areas of land that can be built on.
