Common Mistakes to avoid when buying property in Germany From Luxembourg

Plenty of Luxembourg residents dream of owning a property in Germany. More space, better prices, and a quieter place to raise a family sound like a smart move. But buying across the border isn’t as easy as crossing a street. German property comes with rules, fees, and tax details that can trip up even careful buyers.

In this guide, we will look at the most common mistakes to avoid when buying property in Germany. If you are planning to make the move or invest soon, knowing what to watch for now can save you a lot of stress and money later.

Mistakes to Avoid When Buying Property in Germany

1. Overpaying for the Property

It’s tempting to believe the price you see online. The photos may be look good, the street looks calm, and the agent’s pitch makes it sound like you are getting a deal compared to prices in Luxembourg. But the asking price is just that, an ask. It doesn’t always match what the place is really worth.

Before you put in an offer, just check what similar homes in that area have sold for. But don’t stop at one or two listings. Look at the price per square metre. Talk to local agents who actually know the neighbourhood, not just the one selling the house.

Prices can change a lot from town to town. For example, a house in Trier won’t cost the same as one near Saarbrücken, even if they look similar on paper. If you skip this step, you might pay far more than you should.

Once you know what a fair price looks like, don’t be shy about negotiating. Most sellers expect it. If the numbers don’t feel right, walk away. Remember, paying too much is worse than missing out.

Not sure how much you can really afford? Calculate your mortgage to get a clear idea before you make an offer.

2. Rushing & Skipping Due Diligence

It’s easy to feel pressure when you find a place that seems right. The agent says someone else is interested. This is exactly where most people make mistakes.

Take a step back and check what you are really buying. Walk through the house or flat by yourself. Look for cracks, leaks, or anything that might cost you a huge later. Don’t rely on pictures alone because they rarely show the bad corners.

Also, be clear on where the property starts and ends. The Plan Cadastral is the official map that shows the exact borders. If you skip this, you might end up arguing with a neighbour about a fence or a shared path you didn’t know existed.

Another thing to check is the Grundbuch. This is actually Germany’s official land register. It confirms who owns the place, but also shows if there’s a loan or a right of way linked to it. Many buyers ignore this and end up stuck with problems they didn’t see coming.

If you are not sure what you’re looking at, hire a local surveyor or a lawyer who knows the system. Or get advice from Smart Finance, we help Luxembourg buyers handle these checks properly. It costs a bit now, but it can save you a big headache later. Take your time and check every detail. It’s better to lose a deal than to buy trouble.

3. Ignoring Hidden Costs

It’s easy to get stuck on the price you see in the listing and forget what comes next. In Germany, buying a home always means extra costs, and they add up quickly, especially if you’re buying from Luxembourg and moving money across the border.

First, there’s the Grunderwerbsteuer, which is the property transfer tax. This is a set percentage of the price and depends on where the house is. Near Luxembourg, it’s usually around 5%, but across Germany, it runs anywhere from about 3.5% up to 6.5%.

Then you’ll pay notary fees and the land registry charges. You can’t skip these, since they make the sale official. Together, they are usually about 1.5% to 2% of the purchase price. If there’s an agent involved, add another 3% to 7% plus VAT. Who pays what can vary, so always check.

If you are buying a flat instead of a house, don’t forget the Hausgeld. This is the monthly fee for upkeep and shared costs in the building.

Many buyers crossing the border also forget about the smaller things like bank fees for moving money, or paying an advisor if you are not comfortable with legal German. These bits might not seem like much on their own, but together they do stack up.

In the end, all these extras can push your budget up by 10% or more. Lots of first-time buyers don’t plan for that and get caught out at the last minute. So don’t be one of them.

4. Underestimating Long-Term Maintenance

Many first-time buyers think the spending stops once the purchase is done. The truth is that the real bills often show up later, and may be sooner than you expect.

When you own a home, you need to cover the repairs by yourself, including roofs age, heating systems break down, or whatever. Even a new place needs regular care to stay in good shape.

If you are buying an apartment, you share the higher costs with the other owners. Things like a new roof or an upgrade to the building’s heating usually come from a shared fund. If that fund doesn’t have enough in it, the owners split the bill. That can mean a sudden payment you didn’t plan for.

It helps to put money aside each year, even if nothing goes wrong right away. A simple rule is, to save about 1% of your property’s value each year for repairs and updates.

Add good home insurance to that plan. If you ever have storm damage, leaks, or a break-in, you’ll be glad you have it. The yearly cost is worth it for the peace of mind alone.

A well-kept home holds its value and costs you less in the long run. Set money aside for upkeep from the beginning, it’s far better than scrambling to pay for a big fix later.

5. Not Checking Community Rules

When you buy an apartment in Germany, you are not just buying your unit, you are also signing up for how the building is run. Every block of flats with more than one owner has a Gemeinschaftsordnung. This is actually the official rulebook for how everyone uses and shares the property, including the garden, stairs, central heating, etc..

Unfortunately, many first-time buyers skip it. And that’s risky. These rules can shape what you can and can’t do in your own home.

Take renovations, for instance. If you want to take down a wall or change your windows, you might need permission from the other owners. The same goes for pets too, some communities limit which animals you can keep or how many. Always check before you assume your dog or cat is fine.

Subletting is another common one. Some buildings allow it, some others don’t. If you ever plan to rent out your flat short-term or even long-term, you will want to know if there are any limits.

Before you commit, ask for the Gemeinschaftsordnung and read it properly. If German isn’t your first language, bring in a lawyer or an expert advisor. It’s better to spot problems now than to fight over rules later.

6. Overlooking Encumbrances on the Property

Plenty of buyers focus on what they can see, like the house, the price, and the street. But what really matters is what’s on the paper, and that needs a bit more attention.

In Germany, every piece of land has an official record called the Grundbuchauszug. This document shows who owns the property. And more importantly, it lists anything attached to it, like loans, old debts, etc. These don’t disappear when you buy the place, but they come with it.

For example, the seller might have used the house as security for a loan that hasn’t been cleared yet.  If you don’t check this before signing, you could end up stuck with problems you didn’t bargain for.

This is why working with a local notary is a must. The notary checks the Grundbuchauszug, explains what it means, and makes sure you know exactly what you are buying. If anything in the record doesn’t make sense, you are free to ask questions. If you are still unsure, Smart Finance can help you find a trusted notary or lawyer to check it properly.

Don’t rush this step.

7. Failing to Plan for Residency and Tax Risks

It’s easy to get wrapped up in finding the right place and forget about what living there can mean for your taxes. But for anyone buying from Luxembourg, it’s worth looking at this before you sign any papers.

If you spend more than half the year in Germany or list the house as your main home, then you might be seen as a German tax resident. That means Germany could tax everything you earn worldwide, not just your income in Germany, but also what you make back home.

There is also a capital gains tax. If you sell the place too soon and make a profit, you might owe tax on that profit too. A lot of buyers don’t think about this upfront and only find out later when they want to sell.

These are the rules that get confusing, so it’s worth seeking advice early. If you don’t know where to begin, take a glance at what taxes to pay when you are purchasing property in Germany so you know how to budget.

Getting this sorted early will save you stress and money later on.

8. Expecting Fast Profit

Some first-time buyers think buying a house across the border will pay off fast. But the truth is, real estate rarely works like that. Property is really a long game. If you expect a quick flip, you could get disappointed.

Border towns do see steady demand from commuters and expats, but the market is not the same as a big city where prices can boom just overnight. The values usually grow slowly over time and you need patience.

If you plan to rent out the place, don’t forget the real costs that come with it. Rental income sounds good on paper, but repairs, vacancies, taxes, and management fees all take a share. You will need to keep the place in good shape to keep good tenants.

Treat cross-border property investment as part of your long-term plan. It’s a way to build steady wealth, but not a way to get rich in a year.

9. Skipping Negotiation or Signing Under Pressure

When the market feels busy, it’s easy to think you need to grab the first place that pops up. Some sellers or agents push hard, saying other buyers are lined up and ready. Don’t let that rush you into a decision.

Always look at the price compared to the similar homes nearby. If it feels too expensive for you, don’t be afraid to offer less. Because negotiating is normal and most sellers expect it.

If you ever feel pushed to sign before you are sure, take a step back. It’s better to lose one house than to buy the wrong one and regret it later.

Moreover, buying property across the border comes with a lot to think about, but you don’t have to do it alone. Smart Finance can help you plan, compare your options, and connect you with local experts so you feel confident at every step.

10. Not Seeking Professional Help

Buying just over the border is not the same as buying at home. The rules, taxes, and paperwork can catch you out if you’re not prepared. And fixing mistakes later often costs more than doing it right from the start.

Work with an agent who really knows the German market and understands how Luxembourg buyers think. Pick a notary or lawyer who’s used to cross-border deals and can walk you through every step easily.

If you don’t have the right contacts yet, Smart Finance can connect you with the cross-border property financing professionals who know this inside out. Good advice upfront saves money, time, and stress later.

If you’re ready to get started, just reach out to our team of advisors. We are here to help.