Dreaming of your own house on the perfect piece of land? This dream can quickly become a financial risk if critical details are overlooked. We show you how to confidently tackle the seven most important hurdles when buying land with a systematic review.
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The topic briefly and concisely
Always check the land register and the list of encumbrances for any registered rights and obligations that might restrict usage before purchasing.
Include additional costs (property transfer tax, notary, land registry) of 10-15% of the purchase price firmly in your budget.
A soil survey costing 1,000-2,500 Euros is essential to avoid costly surprises from poor soil quality or environmental contamination.
Buying a plot of land is for many the first and most important step towards owning property. But what if the supposed dream plot holds expensive secrets? Hidden encumbrances, unexpected construction costs, or legal restrictions can set your project back by years and increase costs by up to 30%. This guide takes you through the seven crucial check steps. Find out what you need to consider when purchasing a plot of land to ensure your investment is on a solid foundation from the very start.
Location Analysis: The Foundation of Property Value
The location is the decisive value driver of a property and influences the resale value by up to 50%. Assess not only the immediate surroundings (micro-location) but also the connection to cities and infrastructure (macro-location). Good connectivity can increase the land value by 15-20% within 10 years. Visit the property at different times of the day to realistically assess noise sources such as commercial operations or transport routes. Check the future development of the area in the municipality's land use plan. A detailed analysis of the property's location protects against negative surprises and secures the long-term value of your investment. This initial assessment lays the foundation for all further evaluations.
Legal Review: The Land Register and Its Secrets
Before signing a purchase contract, reviewing the land register is absolutely essential. This document clarifies ownership and reveals potential encumbrances that could significantly limit the property's value and usability. Section II of the land register, for example, contains rights of way for neighbours or pre-emption rights that could disrupt your plans. Approximately 5-10% of all properties in Germany are subject to relevant encumbrances. Request a current extract that is no older than three months. In addition to the land register, you should check the register of public charges at the relevant building authority, as it records obligations such as building line agreements that are not listed in the land register. A solid legal foundation is essential before you consider construction possibilities. With a well-founded valuation of your property, these risks can be identified at an early stage.
Development Plan: The Framework for Your Construction Project
The development plan (B-Plan) is the most important document that regulates what and how you can build on your property. It provides clear guidelines on construction methods, roof shape, number of storeys, and the building boundaries that must be adhered to. Deviating from the B-Plan can lead to the rejection of the building application and delay projects by months. You can view the B-Plan at any time at the responsible city planning or building regulation office. The following points are particularly important:
Site coverage index (GRZ): Indicates what percentage of the plot area may be built over (e.g. 0.4 = 40%).
Floor area ratio (GFZ): Defines the maximum permissible total area of all full storeys.
Type of construction: Open (detached) or closed (terraced house) construction.
Building boundaries and building lines: Specify where buildings may be erected on the plot.
If there is no development plan, Section 34 of the Building Code applies. Then your project must fit into the character of the surrounding area, which often leads to uncertainties. A professional building law assessment helps to interpret the requirements correctly. Knowing these rules is a prerequisite for the planning of the building structure itself.
Site surveys and contaminated land: What lies beneath the surface
The nature of the building site's soil is a significant cost factor that is often underestimated. A soil survey provides insights into the load-bearing capacity of the soil, the groundwater level, and potential contamination (pollutants from previous use). The cost for such a survey ranges from 1,000 to 2,500 euros – a small investment compared to the potential subsequent costs. If complex foundations or soil replacement become necessary, additional costs can quickly exceed 20,000 euros. Particular caution is advised with plots that were previously used for commercial purposes, such as petrol stations or chemical cleaning facilities. A glance at the municipality's register of contaminated sites offers initial clues. Without a clear picture of the subsoil, you incur an incalculable financial risk when purchasing a property. Once the soil has been examined, the focus shifts to the utility supply of the property.
Development: The connection to civilisation
A property is considered developed when it is connected to public utilities. Before purchasing, be sure to clarify the status, as the costs for new development can be significant, ranging from 10,000 to 25,000 euros or more. The municipality can involve property owners in up to 90% of the costs. Full development typically includes:
Connection to the road and path network
Connection to the water supply and sewage system
Access to the electrical grid
Connection to the telecommunications network (telephone, internet)
Inquire with the relevant municipality about the development contribution notice. This is the only way to ensure there are no outstanding payments. A precise market overview helps you evaluate these costs in the overall context. Once these points have been clarified, you must calculate all the ancillary costs of the purchase.
Additional purchase costs: The true total costs of acquisition
The purchase price alone accounts for only part of the total costs. Additionally, the ancillary purchase costs amount to 10 to 15% of the purchase price, depending on the federal state, and must be included in your financing plan. These costs are non-negotiable and consist of several items. The real estate transfer tax is the largest component and varies significantly between federal states (3.5% in Bavaria, 6.5% in Brandenburg). There are also the notary and land registry costs, which together account for about 1.5 to 2.0% of the purchase price. So, plan for at least 30,000 euros in additional costs for a purchase price of 300,000 euros. A solid real estate financing plan is therefore essential. Once all cost points are clear, the final step is to go to the notary.
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In Germany, a property purchase only becomes legally binding with the notarisation of the purchase contract. The notary acts as a neutral entity and ensures that the contract complies with legal requirements. After signing, they arrange for the priority notice of conveyance in the land register, securing your claim to ownership. The final transfer of ownership only occurs after payment of the purchase price and the land transfer tax. Carefully review the draft contract, which you receive at least 14 days before the appointment. Clear up any unresolved issues before signing. If you have questions about the process, an expert or the Guide to Notary Questions can assist you. With this last step, you have laid the foundation for your project.
Conclusion: Diligence beats risk
Who is liable for contamination on a purchased property?
Generally, the owner of a property is liable for contamination, even if they did not cause it. Therefore, it is crucial to establish clarity before the purchase through a soil survey and research in the contamination register. Clauses on liability distribution can be included in the purchase agreement.
What are the notary fees when buying property?
The notary and land registry fees are regulated by the Court and Notary Fees Act (GNotKG) and are the same for all notaries. In total, they amount to approximately 1.5% to 2.0% of the notarised purchase price.
What happens if there is no development plan?
If there is no development plan, the permissibility of a construction project is determined by § 34 of the Building Code (BauGB). This means the planned construction must fit in with the type and scale of the surrounding development. This offers more flexibility but also more uncertainty, often requiring a preliminary building inquiry.
Can I withdraw from a property purchase?
Withdrawing from a notarised purchase contract is only possible under certain conditions specified in the contract, such as if financing fails or significant defects like contamination were concealed. There is no general right of withdrawal.
How long does it take until I am listed as the owner in the land registry?
After the notary appointment, an advance notice of conveyance is initially entered. The final registration of ownership in the land registry occurs only after the purchase price has been fully paid and the certificate of no objection from the tax office (after payment of real estate transfer tax) is available. The entire process can take several weeks to months.
What is the difference between the land registry and the building encumbrance register?
The land registry documents private law relationships such as ownership, mortgages, and easements. The building encumbrance register, on the other hand, lists public law obligations of a property owner towards the building authority, such as tolerance obligations or acceptance of boundary distances. Both registers must be consulted for a complete review.
Additional useful links
The Federal Statistical Office (Destatis) offers publications on construction prices, the property price index, and land purchase values.
The Federal Ministry of Justice provides information on online access to the land register.
The Federal Ministry of Finance provides information on property tax and land acquisition tax.
The German Federal Bank offers indicators for the residential property market.
The Federal Chamber of Notaries (BNotK) provides a glossary of terms related to property purchase.
The National Association of German Cooperative Banks (BVR) offers an economic overview.
The German Real Estate Association (IVD) publishes its annual report on the German real estate industry.
FAQ
Who is liable for contamination on a purchased property?
In principle, the owner of a property is liable for contaminated sites, even if they did not cause them. Therefore, it is crucial to gain clarity before purchasing through a soil survey and research in the contaminated sites register. Clauses on liability distribution can be included in the purchase contract.
What are the notary fees when purchasing a property?
The notary and land registry fees are regulated by law in the Court and Notary Costs Act (GNotKG) and are the same for all notaries. They amount to a total of approximately 1.5% to 2.0% of the certified purchase price.
What happens if there is no development plan?
If there is no development plan, the permissibility of a building project is determined by § 34 of the Building Code (BauGB). This means that the planned construction must fit in with the nature and scale of the surrounding development. This offers more flexibility but also more uncertainty and often requires a preliminary building inquiry.
Can I withdraw from the property purchase?
Withdrawal from a notarized purchase contract is only possible under certain conditions specified in the contract, for example, if financing falls through or significant defects like undisclosed contamination are present. There is no general right of withdrawal.
How long does it take for me to be registered as an owner in the land register?
After the notary appointment, a priority notice of conveyance is first recorded. The final transfer of ownership in the land register only takes place after the purchase price has been fully paid and the clearance certificate from the tax office (following the payment of property transfer tax) is available. The entire process can take several weeks to months.
What is the difference between the land register and the building encumbrance register?
The land register documents private law relations such as ownership, mortgages, and rights of way. The register of building encumbrances, on the other hand, lists public law obligations of a property owner towards the building authority, such as duties of tolerance or the acceptance of distance areas. Both registers must be consulted for a comprehensive examination.
