People
buy property in Berlin
for various reasons. In comparison to prices in other parts of Europe, property in Berlin is still priced low and is a good
investment for capital gains. Some move into Berlin because of the city’s age old
atmosphere of culture, wide open spaces, less congestion and better quality of
life. Berlin has a charm of its own.
Investors
and people looking to settle down in Berlin
must consider various aspects before investing in property. There are things to know before
buying Berlin property and
these will help buyers get better value for money as regards quality of life
and also returns should they sell at a future date. There are two important
things to consider: location and taxes.
Tax
perspective
For
investors the tax perspective is more important if they wish to realize a
profit and appreciable returns.
- Depreciation ranges from 2 to 2.5% spread over 40 to 50 years
- No capital tax gains provided property is sold after 10 years of ownership
- No CSG-RDS
- Land tax is levied at the rate of 6%
- Legal fees amount to 1% and registration accounts for 0.5% of property price
Further,
investors would do well to form a company and then invest in property in order
to attract lower tax rates and limit liabilities.
Location
Property
prices vary widely across the various districts of Berlin. Prices also vary according to
location of building within a specific district and its age. It is worth
knowing about the various locations.
- Mitte: Mitte is posh, home to some classy buildings dating back to the 1920s as well as modern construction. There are pockets of residential buildings among commercial buildings and also the large Tiergarten park around which there are some pricey properties.
- Charlottenberg: This is out and out a shopping district crowded with stores and five star hotels with Kurfurstendamm or Ku’damm being a lively extension full of life and activity. Expect higher prices in this classy district.
- Kreuzberg: Mainly home to Turkish migrants, this district is full of clubs and cafes with neighboring Neukolln being an attractive investment destination.
- Prenzlauer Berg: Northeast of Mitte, this is a working class district that is growing after East Berlin and West Berlin merged. Prices of property are mid-range in this location making it a worthwhile destination for people looking to invest or settle down.
- Friedrichshain: an old workers district is now getting a makeover with plenty of bars and cafes as well affordably priced residential and commercial buildings.
- Grunewald and Zehlendorf: These are green spaces and perfect for people looking to settle down with their families.
In both
matters it would be difficult for an outsider to find the perfect deal,
especially because most property transactions are carried out by brokers. Then
there is the matter of due diligence as regards legal processes, property
ownership and due diligence concerning condition of a building and repair
costs. All these processes are best handled when a buyer retains a Berlin based real estate
agency. One only needs to describe expectations and the realtor takes it up
from there.
