How to Buy a House in Germany as a Luxembourg Resident?

Buying a house in Germany is becoming an attractive option for many Luxembourg residents, especially cross-border commuters. Although most Germans prefer renting and home ownership rates remain lower compared to other European countries, cross-border home buying is increasingly popular due to better affordability and more living space just over the border.

So, why Luxembourgers heading just across the border? The prices at home keep rising, and it’s getting harder to find enough space without breaking the bank. Meanwhile, towns in Germany like Trier or Saarland offer more houses for your money, an easy daily commute, and better chances of finding something that actually suits your life.

But purchasing a property in Germany isn’t exactly the same as buying at home. There are extra steps to consider, like rules, paperwork, taxes, and what to expect from German banks if you live and work in Luxembourg. If you are weighing up this move, this guide will walk you through what are the requirements, and how to set things up properly from the start.

Can a Luxembourg Resident Buy Property in Germany?

Absolutely, yes and buying property in Germany as a foreigner is not that unusual.

If you live in Luxembourg, you are free to buy a house or apartment in Germany. There are no special permits or hidden restrictions. Whether you are an EU citizen or not, German law doesn’t block foreigners from owning property. Luxembourgers have the same rights as German buyers under EU rules.

You don’t even require a German visa or residence permit just to own a property. However, owning property in Germany doesn’t automatically grant you residency or visa rights. What you do need is a local notary. They handle all the paperwork for you, check all the legal details, and register the property in your name once the sale is done.

There are a couple of extra costs to keep in mind. You’ll pay a real estate transfer tax, which can be anywhere between 3.5% and 6.5% of the purchase price, depending on where you buy. There are also notary fees and, sometimes, an agent’s fee if you are working through a real estate agent.

If you need a mortgage, German banks do lend to non-residents, but they might ask for a larger deposit than they would from someone living in Germany full-time. Many Luxembourg buyers keep their main home in Luxembourg and use the German property as a second home, which often makes things more easier for tax and registration.

Key Requirements to Buy a House in Germany

Before you begin your house-hunting journey, it’s good to know what you’ll need to have sorted if you want to buy in Germany as a resident of Luxembourg. Here’s what you’ll need to prepare:

Proof of Funds

You will have to show that you can afford to pay for the property and meet any additional expenses that come up with the purchase. This means having enough saved for the real estate transfer tax, notary fees, and possibly an agent’s fee too. If you are taking out a mortgage, be prepared for the bank to want a deposit. For non-residents, many banks ask for at least 20% of the price upfront.

Getting a Mortgage

If you are planning to borrow, you will have to prove that you can pay it back. German banks and cross-border brokers will want to see a steady income, a clean credit record (Schufa), and a very clear picture of your finances. Many people start with their home bank in Luxembourg to see what’s possible, then compare this with what the German banks or brokers can offer. Just remember to tell the bank you are only asking for information, not a formal offer, so your credit score doesn’t take a hit.

Not sure how much you could borrow? Use our mortgage calculator to get an idea before you talk to your bank.

Identification and Paperwork

You will need a valid passport or EU ID. The Lenders usually ask for your work contract, recent payslips, and tax statements. Some might also want proof of other savings or assets.

Working with a Notary

In Germany, buying a home always goes through a notary. They verify the legalities, prepare the contract, and register you as the new owner. You are free to choose the notary of your choice. If you’re not fluent in German, you can hire a translator or even a financial advisor to help during meetings and when signing paperwork on your behalf.

Getting on the Land Register

After the contract is signed, the notary handles the process of adding your name to the land register (Grundbuch). That’s when you officially become the owner of the property. The notary will also inform the tax office so you can settle the property transfer tax.

Searching for a Property

This is all up to you, but it’s worth taking your time. Check online listings, ask local agents, and keep an eye on newspapers as well, because some sellers still advertise there. Have a look and visit the properties that you have wishlisted before you commit. Once you have found the right place, make an offer, negotiate the price, and get written confirmation from your bank that your mortgage has been approved before you sign anything.

How long does the buying process take?

Buying a house in Germany usually takes about three to eight months from the moment you start looking until you get the keys. How long it takes depends on how quickly you find a place and get your mortgage sorted.

Once you agree on a price, the notary drafts the contract. By law, you get at least 14 days to read it through before signing. After you sign, you’ll normally pay the purchase price within four to six weeks. The keys change hands once the money is in the seller’s account, and your name is added to the land register shortly after.

If you’re buying a new build or the deal is more complicated, it can take longer. But for most buyers, the whole process wraps up well within eight months.

Mortgage in Germany for Foreigners and Luxembourg Residents

If you reside in Luxembourg and wish to buy a house a little over the German border, you will probably need a cross-border mortgage. Some German banks do lend to buyers from outside Germany, but it’s more limited than it is for locals. Most lenders prefer to stick to properties inside Germany because the loan is backed by the German land registry. If you are buying close to the border, in places like Trier or Saarland, your chances of getting approved are usually better.

One thing to know here is how the loan-to-value ratio or LTV works. For German citizens and residents, banks sometimes offer loans for the full property price. But for non-residents or people who don’t pay taxes in Germany, banks usually limit the loan to about 60% of the property’s value. So, you will have to cover around 40% yourself, plus extra costs like notary fees and taxes. The bigger your own contribution, the lower the interest rate you are likely to get because the bank takes on less risk. If you already own property in Germany, that will be beneficial too, especially if it has enough equity.

Many people also look at Luxembourg banks. They often have special deals for commuters and buyers who want to own a property just across the border. You can choose from fixed, variable, adjustable, or mixed-rate loans, that are completely dependent on your income and savings.

To get a complete idea of how these options work, you can have a look at our guide on How to Buy Property Abroad with a Cross-Border Mortgage from Luxembourg.

If you are not sure which way to go, talking to a mortgage broker or an advisor who understands cross-border mortgages is recommended. They can help you figure out what’s possible and compare offers so you don’t miss out on a better deal.

What Taxes Do You Pay When Buying a House in Germany?

Before you sign anything, it helps to know what taxes come with owning a place in Germany. Here’s a simple look at the main taxes Luxembourg buyers should plan for.

Property Transfer Tax

When you buy, you will pay a one-time property transfer tax, called Grunderwerbsteuer. This is usually between 3.5% and 6.5% of the purchase price, depending on the region. It’s paid not long after you close the deal.

Yearly Property Tax

Once you own the house, you’ll also pay a local property tax (Grundsteuer) every year. This is set by the town or city and is usually between 0.26% and 1% of the property’s value.

Watch Out for Residency Rules

If you live in Germany more than 183 days a year, or make the house as your permanent home, you could be considered a German tax resident. That means your worldwide income could be taxed in Germany as well, so it’s smart to plan ahead.

Why Work With Smart Finance

Buying a property across the border isn’t just about the paperwork. It’s about giving yourself and your family a fresh start and a better daily life. But dealing with different banks, rules, and cross-border steps can make it feel more complicated than it should be right?

That’s where Smart Finance comes in. As a trusted property finance advisor in Luxembourg, we know how German lenders work, what they expect from Luxembourg buyers, and how to avoid surprises that slow things down. We have helped plenty of people get the right loan, skip hidden costs, and actually close the deal without stress.

Ready to buy in Germany? Get in touch with the expert financial advisor in Luxembourg today. We’ll guide you every step of the way.