GERMANY Law and Practice Contributed by: Wolfram H. Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
2. Sale and Purchase 2.1 Categories of Property Rights
choose their heating system (including heat pumps, hybrid systems, biomass and gas/oil heating). From 1 January 2029, a rising quota of CO₂-neutral fuels will apply (starting at 10% and increasing in stages until 2040). The Act will also implement the EU Build - ings Energy Performance Directive. For investors and owners, removing mandatory heating system require - ments reduces regulatory uncertainty, although further adjustments to meet climate targets remain possible. Federal Building Code Reform – Second Stage The “Bau-Turbo” (Act to Accelerate Housing Con - struction and Secure Housing), in force since 30 October 2025, introduced a new Section 246e to the Federal Building Code ( Baugesetzbuch ), allowing municipalities until 31 December 2030 to deviate from planning law and approve additional housing within three months without changing development plans. A second, more comprehensive reform of the Federal Building Code is planned, including uniform rules for infrastructure procedures, multi-purpose coding of plots and extended deemed approvals. Timing is still open, but adoption in the current legislative period is considered likely. Rent Law Reform – Second Package (Mietrecht II) A second rent law reform package is in inter-minis - terial consultation. Planned measures include cap - ping index-linked rent increases at 3.5% per year in tight housing markets, limiting short-term tenancies to six months and doubling the simplified modernisa - tion surcharge threshold to EUR20,000. To prevent circumvention of the so-called rent brake ( Mietpre- isbremse – rent control) via furnished lettings, furni - ture surcharges will have to be shown separately and capped at 5% of the net cold rent (base rent). The package is expected to enter into force by early 2027 and would further limit returns, especially in furnished and short-term lettings. CO₂ Pricing From 2026, a new auctioning phase under the Fuel Emissions Trading Act is expected to increase the CO₂ price to EUR55–65 per tonne. This will raise heating and operating costs for fossil-fuel-heated properties and strengthen incentives for energy-efficient refur - bishment.
Generally, there are freehold titles granting full and absolute ownership, and heritable building rights ( Erbbaurechte ) giving the right to lease the land for a certain amount of time (30–99 years) and to erect buildings on it. Both categories can be split into con - dominium shares accompanied by special rights of use for a designated area of the property. Properties can be encumbered with various rights in rem, such as easements ( Dienstbarkeiten ), land charg - es ( Grundschulden ) and mortgages ( Hypotheken ). 2.2 Laws Applicable to Transfer of Title The Civil Code and the Land Registration Act apply to every transfer of title. In addition, permits under other laws, in particular, the Federal Building Code for properties located in special areas and the Real Properties Transfer Act ( Grundstücksverkehrsordnung ) for first-time sales in eastern Germany after 28 Sep - tember 1990, might be necessary. Local authorities might have statutory pre-emption rights in certain designated areas. The laws applicable to transfer of title do not distin - guish between the types of use of the property. 2.3 Effecting Lawful and Proper Transfer of Title Transfer of title requires a deed notarised by a notary containing an agreement on the sale ( Kaufvertrag ) and an agreement on the transfer ( Auflassung ). The notary applies for the permits necessary for the sale and waiver of pre-emption rights, which are a prereq - uisite for transfer of title and usually also for the pay - ment of the purchase price. The notary also informs the tax authorities about the conclusion of the sale and purchase agreement. They will issue a clearance certificate confirming that real estate transfer tax has been paid, which is necessary for the registration of transfer of title in the land register ( Grundbuch ). While economic transfer of title (transfer of posses - sion, use and burdens) is usually agreed for the day following the payment of the purchase price, the actu -
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