German Property Market – Rules, Regulations and Taxation

Legal Restrictions

There are no specific legal restrictions on cross-border real estate investments in Germany for foreigners. Normally a valid passport and an adequate capital will be sufficient to purchase property. It should be noted that private investors will not be given residential status merely by acquiring property in Germany, as is the case in some other European countries.

With regard to indirect real estate investments, however, some general rules apply. They are laid down in different laws and are binding for both foreign and domestic investors.

Ownership in Germany

The owner of a property is generally in possession of both the plot of land and any buildings upon it. The rights to ownership and inheritance are guaranteed by law.

If an investor acquires a single flat in a multi-family house, it is a matter of property ownership. However, this property ownership does not entail ownership of the land and building associated with the property. Instead the investors obtain a co-ownership share of the jointly owned property which the flat is a part of. 

According to private law, the owner …

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Energia continues to invest in Ireland

Energia, a Dublin based energy company, parented by the Viridian Group, has recently announced that it will be investing €3 billion in Irish renewable energy over the next five years. These figures show promise of the creation of 200 more jobs directly within the organization. Additionally, there is likely to be a creation of between 3,000 and 5,000 construction jobs, given the sheer amount of huge projects that will soon be under way. 

Many of the promised projects include a focus on the creation of renewable energy. This goes hand in hand with the Irish government’s plans to increase the country’s consumption of renewable energy by making it the most accessible and cost efficient type of electricity generator. The government hopes to increase renewable energy in the electricity market from 30 to 70pc by the year 2020, according to the Climate Action Plan. 

The creation of onshore and offshore wind farms, solar power, hydrogen fuel generation, bio-energy facilities and the smart grid are all huge factors steps towards the fulfillment of this governmental initiative.  

What is most interesting about this …

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Irish economy projected to make gains

According to a report posted by Ernst & Young (EY), one of the Big Four accounting firms, the Irish economy is seemingly on the rise. This multinational company with HQ in London, England, United Kingdom has been investigating the health of the Irish economy.

Through their research, the company found insight that allowed them to project how the Irish GDP will grow within the current year. As of now, they have estimated that the economy is to grow by 4.1%. This number is consistent with that of the Central Banks, who projected growth of 4%.

These numbers are based solely on the first three months of 2019, and are bound to change with more and more information collection. As of now, their predictions are based largely on substantial corporate tax returns and the addition of new jobs into the market.

Although there are significant positive projections associated with these findings, there are many possible repercussions. One of the most prevalent issues would be the lack of resources available within the Irish economy, but especially around Dublin, to be …

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Expanding Housing & Development: New Sites

Three new building sites have become available for development. As of early this week, Savills brought three properties to the market that will allow for development. The properties are located near Citywest Business Campus in Dublin, Kilkenny, and north Dublin.

The Citywest property is listed on the market for the price of €5.6 million. The site has been defined as 9.7 acres amounting to a little more than €1.7 million per acre. The property is also available at €3.25 million for one 5 acre plot or 4.7 acre plot. The objective of this property was defined as to “to provide for enterprise and employment-related uses”. This new property listing can be greatly beneficial for Dublin. Introducing a 10 acre plot can be developed and create new jobs and housing.

The second property in North Dublin that has been listed at a starting price of about of €2 million. This lot amount to about three acres. The price per acre is about €1.5 million. The property has planning permission to develop 35 residential units, and may have potential for an additional five homes …

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Analyzing rental yields – what this means for investors and renters

An article was published by Fiona Reddan on the Irish Times early this morning examining and evaluating property investment options in and around Dublin today. The article uses the measure of rental yields, how much rental income a property generates as a percentage of its market value, to compare the worthiness of investment options.

 

The major finding in the article was a negative correlation between housing prices and rental yields, meaning that, in Ireland, higher priced properties generate lower investment yields on average. The worst places to invest includes areas such as Dublin 6, Dublin 4, and Dublin 14, where average sale prices are well above €500,000. The best places to invest includes Dublin 10 and Dublin 2, where the average market value of property is much lower. In Dublin 6 for example, the average sale price is €706,741, while rental yields are only 3.6%. On the other hand, in Dublin 10, the average sale price is €173,478, but the annual rental yield is 10.4%.

 

These …

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Best Deposit rates in Ireland March 2011

The best deposit rates presently available in Ireland are as follows:

Best Demand Account:     Ulsterbank Special Interest Deposit 4%* Best 1 month deposit:      NIB eSaver 3% Best 3 month deposit:      PTsb 3mth Fixed 2.5% Best 6 month deposit:      PTsb Interest First 3.25% Best 12 month deposit:    Nationwide UK (Irl) 3.65%

We can find the best options for you on other terms or go through the various deposit choices available if you want help navigating the market call us on 01 679 0990

*To a maximum of €15,000

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Slow growth economy stock returns

There is a growing body of work suggesting that many developed countries will cease to roar ahead at 3%+ growth rates in the future, that instead we are likely to see a growth rate of about 2% p.a. leading to a ‘steady state’ economy.

If you look at the USA the inflation rate was only 1.9% over the decade from 2000-2010. If you strip out the 2008 recession effect it still only comes out at 2.6%. This could mean that Bernanke’s approach of effectively putting a floor on stock prices could lead to a revision irrespective of intentions.

Take a look at the picture below.

This could mean that in the future the standard P/E expectations could drop and a corresponding dividend yield increase become the natural premium or expectation of stock market investment, strangely; this will be getting back to the original reason people invested in stocks prior to the 20yr secular bull of the 80’s-late 90’s.

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