GERMANY LAW AND PRACTICE Contributed by: Wolfram H Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
Future Financing Act (Zukunftsfinanzierungsgesetz–ZuFinG) The German Future Financing Act passed in the end of 2023 creates decisive scope for the property industry to significantly boost invest - ments by property funds in photovoltaic systems through regulatory adjustments. The ZuFinG amends, inter alia, the German Capital Invest - ment Code (KAGB) and enables property funds to invest also in ground-mounted systems on undeveloped land. In this respect, the draft law aims at creating a framework for sustainable investments in line with the sustainable finance strategy pursued by the German government. Open-ended mutual property funds (Section 230 et seq. KAGB) will also be allowed to acquire undeveloped land in the future, if the land is intended and suitable for the construction of facilities for generation, transport or storage of electricity, gas or heat from renewable energies. Energy Price Cap (Energiepreisbremse) The energy price cap which was introduced in the year 2023 in order to support end consumers with significantly increased gas and electricity prices will expire in April 2024, which is why VAT on gas will return to the original percentage rate of 19% and therefore lead to increased costs.
Properties can be encumbered with various rights in rem, such as easements ( Dienst- barkeiten ), land charges ( 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, per - mits under other laws, in particular, the Federal Building Code for properties located in spe - cial areas and the Real Properties Transfer Act ( Grundstücksverkehrsordnung ) for first-time sales in eastern Germany after 28 September 1990, might be necessary. Local authorities might have statutory pre-emption rights in cer - tain designated areas. The laws applicable to transfer of title do not distinguish between the types of use of the prop - erty. 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 prerequisite for transfer of title and usually also for the payment 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 ). The acquisition process has not been changed or simplified due to the COVID-19 pandemic. While economic transfer of title (transfer of pos - session, use and burdens) is usually agreed for the day following the payment of the purchase
2. Sale and Purchase 2.1 Categories of Property Rights
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 condominium shares accompanied by special rights of use for a designated area of the property.
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