Annuity loan
A loan with constant payment rates, the so-called annuity. The annuity is made up of interest and repayments.
Follow-up financing
Follow-up financing is essential at the expiration of the initial interest rate agreement if the loan is not repaid in full.
Land Use Ordinance
The Land Use Ordinance (Baunutzungsverordnung) in Germany determines the type and extent of structural use of land, the type of construction and the size of the plot area that is to be built on.
Building Savings
Your building savings agreement combines two essential elements for the financing of your construction project: the building of capital, by saving a fixed sum every month and also the fixed rate low-interest house purchase savings loan.
Operating costs
With real estate, operating costs are incurred by the owner as property encumbrances. These are the responsibility of the owner. This principle applies even if a property has been let. However, the lease usually includes a clause which states that the tenant must reimburse these additional costs to the landlord. The German Civil Code provides for the possibility to either agree upon advance payments with subsequent final billing or to use an appropriate lump sum amount, which is then used to satisfy the overall operating costs.
Bungalow
A bungalow is a one-storey house; it frequently has a flat roof, but does not have to. In the vernacular, the term 'bungalow' is frequently and mistakenly equated with a flat roofed house. A possibly existing basement is not counted as a storey.
Semi-detached house
A house with two units sharing a common wall
Detached house
Single family dwelling
Assessed value
Taxation basis for property tax
Energy pass
see Energy performance certificate for buildings
Energy performance certificate for buildings
The European Directive on the energy performance of buildings requires all member states to introduce an energy certificate for buildings. The energy certificate objectively informs consumers, points out potentials for saving energy and makes it possible to quickly compare the energy-related quality of houses nationwide.
Hereditary building right
see Leasehold
Leasehold (Lease in perpetuity)
Hereditary building rights (also known as leasehold rights) are, from the aspect of the party with the hereditary right, a resellable and hereditary right to own a structure on or underneath a plot of land owned by another owner. From the perspective of the owner of the land, the leasehold is a limited real right, secured on his property. The hereditary building right will be treated like a piece of land itself (so-called "property-equivalent right) and is registered in the land title register (in Section II) like a property. The leasehold right, on its own, can be encumbered, for example with property liens (land charge and mortgage). In most cases. there is an agreement that the person holding the hereditary right must pay the owner of the property a one-time payment or monthly payments (the so-called ground rent). The legal basis for the hereditary building right in Germany is the latest valid version of the hereditary building right ordinance (Erbaurechtsverordnung) dated 15 January 1919. The hereditary building right is created as a result of the agreement between the property owner and the party entitled to the heredity building right, and the registration of such a right in the cadastral register (land title register). The hereditary building right expires at the end of the agreed period. The party holding the heredity right (leasehold) must not remove the erected building from the property after the agreed time, but receives remuneration for the building value. Hereditary building right (leasehold) contracts typically run for 75-99 years. Commercial leasehold contracts typically have a duration of 40 to 50 years. The leasehold may be sold and inherited. Sales and structural extensions require the approval of the landowner; the leaseholders pay a rent instead of a purchase price. This is usually between 3 and 5 percent of the land value per annum.
Site development
Site development as defined in paragraphs 123 et seqq. German Building Code (BauGB) is required to initially prepare the local streets, parks, utilities (electricity, gas, water) and waste water systems for a site. On the other hand, this does not include regional facilities. Plots must be developed prior to being used for construction. The development is a mandatory prerequisite for any building development. As per para. 127 I BauGB, the municipalities levy a charge to cover the costs for public improvements. The community can transfer the development of a publicly owned development contract to a third party, para. 124 I BauGB, as a result of which the technical implementation and costs of the development are passed onto a land developer such as a housing society. Pursuant to para. 123 I BauGB, the responsibility for provision of the local public infrastructure cannot be shifted and the local authority remains responsible in legal terms for the development in spite of the concluded contract.
Land use plan
The Land Use Plan (LUP) (preliminary plan) represents the proposed urban development of a community. It is the result of a community's fundamental political and technical planning processes. Its contents are governed by the provisions of para. 5 of the German Building Code.
Building energy certificate
see Energy performance certificate for buildings
Floor-space index
Floor space index (Utilisation factor)
Land title register
Official register containing information about land, ownership structures and any encumbrances. Land title registers are maintained by federal region at the District Courts or notary publics.
Real estate transfer tax (stamp duty)
Stamp duty is incurred upon transferring developed or non-developed properties as well as property-equivalent rights. Currently, stamp duty is 3.5% of the purchase price. The stamp duty is generally borne by the buyer and must be paid to the respective tax office. Registration of ownership in the land title register cannot be carried out if the stamp duty is not paid.
Land charge (creation)
The land charge is a property's encumbrance in the form that a certain amount is to be paid out of the property in favour of those holding this encumbrance (para. 1191 German Civil Code).
Floor space ratio (FSR)
The floor space ratio indicates how many square metres of built-up area are permitted per square meter of land.
Mortgage
A mortgage entitles the mortgage creditor (mortgagee) to reimburse himself from the proceeds that can be obtained as a result of a sale by court order or the receivership of the property encumbered by the mortgage instead of recovering the owed funds protected by the mortgage from the debtor's total assets. The mortgage is therefore included among the charges on real property. In banking, the mortgage is used as a method to secure loans.
Real estate loan
The real estate loan is one of the most important pillars of your real estate financing. It is a medium- to long-term loan which is protected by the registration of a property lien (land charge or mortgage) in the land title register. The amount of the loan depends on the value of the provided collateral. Real estate loans of up to 80 percent of the collateral value are normal. But higher lending is also possible in individual cases.
KfW Förderbank (Business Development Bank)
The KfW Förderbank promotes construction, living, energy saving, commercial environmental conservation, infrastructure and education.
Cost of living index
The cost of living index measures the changing value of money based on the price of major goods and services (cost of living) to maintain a standard of living. The starting point is the so-called 'shopping basket' that contains a large number of typical consumer goods and services.
Loggia (Balcony)
A loggia is understood to be a covered area of a building, open on at least one side. In most cases, a loggia is enclosed on three sides by the exterior walls of the building. A loggia may be situated on the ground floor as well at a higher level in the form of a return in the facade.
Broker's fee / broker's commission
The broker's commission is the real estate agent's fee for proof of the opportunity to conclude a contract or to broker a contract (para. 652 German Civil Code).
Security deposit
The security deposit is usually three net monthly rents. It serves to protect the landlord's rights under the lease. The security deposit is used by landlords, e.g. for rent arrears or to repair damages. The landlord is obliged to pay interest on the security deposit. Interest is added to the security deposit on an annual basis and therefore increases the security deposit. Upon termination of the tenancy, the landlord must reimburse the security deposit plus any accumulated interest. Usually, the tenant will either set up a savings account for the amount of the required security deposit and assigns this to the landlord or will provide the landlord with a bank guarantee for the agreed security deposit amount.
Co-ownership share
The co-ownership share is the share of joint ownership. This is set out in the partition deed and is expressed in thousandth parts. The co-ownership share is an idealistic, but not an actual share in a property (item). It can be transferred (i.e. sold, for example) or encumbered.
Penthouse
A penthouse is a detached house on the roof of a skyscraper or apartment building. The penthouse is characterised by the fact that it has no common facade or common gable with the structure of the underlying house, but has a patio/deck around the perimeter. There are also mixed types in the form of two or more houses on a roof. These houses are then no longer free-standing houses, but at best row houses with smaller roof patios.
Mid-terraced house
Mid-terraced house or row house
Row house (terraced house)
Terraced house
Commonhold property
The commonhold property includes both the individual freehold (the dwelling itself), and the shared freehold (self-contained spaces that do not belong to the jointly-owned property belonging to the owners, e.g. the garage). Elements of the building, which can be changed, removed or added without affecting the jointly owned property also belong to the commonhold.
Special right of use
The special rights of use are stated in the partition deed. This provision is used to grant the exclusive right of use to parts of the joint ownership to commonhold owners. The flat owners can regulate the use of the commonhold using agreements pursuant to para. 15I of the German Condominium Act. This affects e.g. the use of parking spaces, the garden, the building's facade as advertising space, etc. Special rights of use are registered and are visible in the land title register.
Basement
A basement is a synonym for the lower level or even the cellar level of a building, since this level (with its floor) is below ground level. Frequently the basement is only half below ground level, and the raised ground floor is half a level above it. A lower level is generally only referred to as a basement if the corresponding rooms are intended or designed for living or as space which is permanently used by persons.
Storey proper
All storeys, whose area corresponds with the building's base area, are termed as proper storeys.
Housing allowance
In Germany, a housing allowance is the subsidy paid by the Sate to its low-income citizens towards their rent or the costs of their owner-occupied housing.
House building promotion bonus
The State rewards the payments made into a building savings agreement with the house building promotion bonus. Savers who are entitled to the house building promotion bonus have a taxable income of up to € 25,600 per year (for single people) or € 51,200 (for married couples). Depending on the particular personal tax allowances, their gross income could even be higher. The bonus of 8.8 percent for annual savings contributions is € 512 (for singles) and up to € 1,024 (for married couples). Thus, the maximum house building promotion bonus for a single person equals € 45.06 and € 90.11 for married couples. Savers of 16 years of age and older are eligible for the bonuses.