Buying a rental property as a couple in Germany: ownership, debt and changing plans

Buying investment property as a couple in Germany means answering two easily confused questions. Who owns the apartment is settled by the shares entered in the land register (Grundbuch). Who owes the bank is settled by the loan contract, and joint borrowers are usually each liable for the whole loan. A 70/30 ownership split does not create a 70/30 debt.

Settle both in writing before the notary appointment, together with what happens if you separate, or if one of you dies or moves away. This guide applies whether or not you are married; where the law treats spouses differently, it says so.

Agree what the apartment is for before agreeing a price. Is it a pension asset for 15 years, or savings one of you may need back in five? Who deals with the tenant and the tax return? What if one of you wants to sell and the other does not? The legal documents are easier to draft when they record decisions already made.

Most couples buy as co-owners in fractional shares (Bruchteilseigentum). Each owns a share of the whole apartment, such as one half, and the shares are entered in the land register (§§ 741, 1008 BGB; § 47(1) GBO). If nothing else is specified, the law presumes equal shares (§ 742 BGB).

Unequal property ownership shares are an option where one partner brings more money. The registered shares decide ownership, whatever each of you paid (notar.de). If you register 50/50 although one of you contributed more, the difference is either a written loan between you or potentially a gift. Between unmarried partners, gift tax (Schenkungsteuer) can apply above a €20,000 allowance, counted over ten years (§§ 7, 14, 16 ErbStG; Landesnotarkammer Bayern).

Some notaries suggest a civil-law partnership (Gesellschaft bürgerlichen Rechts, GbR) instead (notar.de). Since 1 January 2024, a GbR can enter the land register only once registered in the companies register (§ 47(2) GBO; § 707a BGB). Ask the notary whether that suits one apartment.

When you both sign the loan contract, you normally become joint and several debtors (Gesamtschuldner). The bank may demand the full amount, or any part, from either of you until the loan is repaid (§ 421 BGB). The lender also assesses both of you, including any residence-permit questions (mixed-status applicants).

Between yourselves, the starting point is equal shares of the debt unless agreed otherwise (§ 426 BGB). A partner who pays more can claim compensation, but only what the other can pay.

Neither of you can simply leave the loan: releasing a borrower needs the bank's approval (§ 415 BGB), and the bank will check that the other can carry it alone.

Illustrative example. Fictional figures, not an offer or advice. Inputs: Alex and Sam, unmarried, buy a €250,000 apartment in Berlin. Purchase costs are €28,925: transfer tax (Grunderwerbsteuer) at 6.0 per cent (€15,000), notary and land registry at an assumed 2.0 per cent (€5,000) and a buyer's commission at an assumed 3.57 per cent (€8,925), as in our guide to how much money you need. Total cost: €278,925. Alex contributes €42,000 and Sam €18,000, each after keeping their own reserves. They borrow €218,925 jointly and plan to share the instalments equally.

The last column never changes. If Sam stopped paying, the bank could claim every instalment from Alex, whatever the land register says. Option 2 looks fairer than it is, because the loan funds most of the purchase; option 3 holds only while the plan does. Whichever you choose, write down what each of you paid and how you share instalments and costs.

A joint loan is usually assessed on two incomes. Run your own budget with each salary removed in turn, including the larger one: parental leave, a career break or a job loss can leave one income paying for two people and an apartment. Our stress-test guide shows how long reserves last.

Alpha Minoris's Buyer's Agent service starts with that conversation, held with both of you: each person's contribution, the reserves you keep and whether the plan works on one income. Once you are ready, it coordinates sourcing, viewings, documents, the financing step and the notary appointment in Berlin, Dresden or Leipzig. How you hold title belongs with the notary and your own advisers.

Co-owners manage the property together (§ 744(1) BGB). For ordinary management, such as choosing a tenant, a majority decides, calculated by size of share (§ 745(1) BGB). At 70/30, the larger owner can outvote the other; at 50/50, neither can. Either may take measures needed to preserve the property alone (§ 744(2) BGB). Rent, costs and charges are shared by share size unless you agree otherwise (§§ 743, 748 BGB). Agree a spending limit each can approve alone.

Each co-owner can demand dissolution of the co-ownership at any time (§ 749(1) BGB). An apartment cannot be divided physically, so without agreement it is sold by court-ordered partition auction (Teilungsversteigerung) and the proceeds divided (§ 753 BGB; § 180 ZVG).

The better routes are selling together or a buy-out, which needs a notarised transfer of the share, the bank's agreement to release the departing partner and a remaining owner who can finance the apartment alone. Transfer tax applies to the share bought unless you are spouses or registered partners, or former ones settling property after divorce or dissolution (§ 3 nos. 4, 5 and 5a GrEStG). A sale within ten years of purchase can also be taxable for the partner who sells (§ 23 EStG).

Unmarried partners have no statutory right to inherit from each other (notar.de; §§ 1924, 1931 BGB). Without a will, the share passes to the deceased's heirs, who become co-owners and can demand a sale (§ 1922 BGB; § 749 BGB). The survivor still owes the whole loan. Each of you needs a will or a notarised inheritance contract (Erbvertrag) (§ 2276 BGB).

A spouse or registered partner has a €500,000 inheritance tax allowance; an unmarried partner falls into tax class III with €20,000 (§§ 15, 16 ErbStG), where rates start at 30 per cent (§ 19 ErbStG). Both allowances assume unlimited German tax liability.

Marriage does not merge assets. Without a marriage contract, spouses live in the community of accrued gains (Zugewinngemeinschaft): each keeps their own property, and the gain in wealth during the marriage is equalised when it ends (§ 1363 BGB). A marriage contract (Ehevertrag) can change this and must be signed before a notary with both present (§§ 1408, 1410 BGB).

Spouses and registered partners can choose joint assessment for income tax, which adds their incomes together (§§ 26, 26b EStG; § 2(8) EStG). Unmarried partners are assessed separately. Shared rental income is generally determined in a separate declaration (Feststellungserklärung) unless the case is of minor importance (§ 180(1) and (3) AO), with each share then reported on Anlage V-Sonstige (ELSTER). Ask a tax adviser (Steuerberater) how this applies to you.

Marriage does not change the loan: spouses who both sign are each liable in full.

Our guide to owning a rental property after moving abroad covers the loan, tax and sale questions. For an apartment in Berlin, Dresden or Leipzig, Alpha Minoris's Vermieter-Autopilot can manage the rental on your behalf: finding tenants, rental contracting and coordinating repairs. Agree in writing who is the point of contact and which spending needs both owners' approval. You both remain the landlords.

• Ownership shares, and why you chose them.
• Contributions and repayments: what each paid and how instalments, costs and reserves are shared.
• A co-ownership agreement (Miteigentümervereinbarung) on management, costs and exit. It can exclude dissolution for a period, though good cause still allows it (§ 749(2) BGB). Entered in the land register, it also binds a later owner of a share (§ 1010 BGB).
• Wills or an inheritance contract.
• Advice: the notary drafts impartially; a lawyer can advise each of you on your own position, and a Steuerberater on gift, inheritance and income tax.

Before choosing ownership shares, agree what each of you puts in, how you share the loan and what happens if plans change. Discuss your first rental property with Alpha Minoris.