A
Acceptance (of works) Bau
Formal declaration by the client that construction work was completed as agreed. Acceptance starts the warranty periods and reverses the burden of proof.
Agent Commission Purchase
The estate agent's fee on a successful brokerage. For residential purchases it has usually been split equally since 2020.
Ancillary Purchase Costs Purchase
Costs on top of the purchase price: transfer tax, notary, land register and any agent commission. Around 8–10 % in Saxony.
Annuity Finanzierung
Constant annual payment of interest and principal on an annuity loan. Over time the interest share falls and the repayment share rises.
B
Building Encumbrance (Baulast) Recht
Public-law obligation of a property owner towards the building authority to tolerate or refrain from something. Recorded in the building charges register, not the land register.
Building Permit Bau
Official permission to carry out a construction project according to the submitted plans, issued by the building authority.
C
Certificate of Self-Containment Recht
Official certificate confirming that a flat is structurally separated from other units — a precondition for creating condominium ownership.
Commission-Free Purchase
An offer without agent commission for the prospect, e.g. in a direct sale by the owner or developer.
Commitment Interest Finanzierung
Interest the bank charges on a committed but not yet drawn loan — typical for new builds with staggered disbursements.
Condominium Management Recht
Professional administration of an owners' association's common property — from accounting to the owners' meeting.
Conveyance (Auflassung) Recht
The notarised agreement between buyer and seller on the transfer of ownership of a property. Basis for the entry in the land register.
D
Declaration of Division Recht
Document setting out how a building is divided into individual ownership (single flats) and common property. The basis of every condominium.
Depreciation (AfA) Steuer
Tax write-off for wear and tear on let property, typically 2–3 % per year on the building value. Reduces taxable rental income.
Disagio (Discount) Finanzierung
A deduction from the loan amount treated as prepaid interest. Lowers the running nominal rate; the amount paid out is less than the loan sum.
E
Early Repayment Penalty Finanzierung
Compensation the bank charges when a property loan is repaid before the fixed-rate period ends — e.g. when the property is sold.
Easement Recht
A land-register right in favour of a neighbouring plot, such as a right of way or utility line. It persists even when the owner changes.
Effective Interest Rate Finanzierung
The annual total cost rate of a loan including ancillary costs. Makes loan offers comparable — unlike the pure nominal rate.
Encumbrance Recht
A third-party right over a property entered in the land register, such as a mortgage, land charge, right of way or right of residence. Usually reduces value.
Energy Performance Certificate Energie
Mandatory document showing a building's energy quality (consumption- or demand-based). Must be presented when selling or letting.
Equity Finanzierung
The buyer's own funds contributed to a financing. More equity lowers the bank's risk and usually the interest rate too.
Eviction Action Recht
A landlord's court action to recover possession of the flat, e.g. after a valid termination for rent arrears.
F
Fixed-Interest Period Finanzierung
The period for which a loan's nominal rate is fixed (often 10–15 years). A follow-up financing follows afterwards.
Foreclosure Auction Recht
A court-ordered sale of a property to satisfy creditors, e.g. on the owner's default. Buying offers both opportunities and risks.
G
Gross Rent (Warmmiete) Miete
Net rent plus advance payments for operating and heating costs. The tenant's actual total monthly outlay.
Gross Yield Bewertung
Annual net cold rent divided by the purchase price, as a percentage. A first rough measure of an investment property's return, before costs.
H
Handover Protocol Recht
Written record of a property's condition at handover (meter readings, defects, keys). Protects buyer/tenant and seller/landlord alike.
Heritable Building Right Recht
The right to own a building on someone else's land — against an annual ground rent, usually for 99 years. The land remains the grantor's property.
Housing Benefit (Wohngeld) Recht
A state subsidy towards housing costs for low-income households (rent or ownership benefit). Not to be confused with the service charge.
I
Individual Ownership (Sondereigentum) Recht
The part of a residential complex owned solely by an individual, typically the flat itself. The counterpart to common property.
K
KfW Funding Finanzierung
Low-interest loans and grants from the KfW development bank for energy-efficient building, refurbishment and age-appropriate conversion.
L
Land Charge Finanzierung
A land-register charge securing a loan. Unlike a mortgage, it is not tied to a specific claim, making it more flexible for banks.
Land Register Recht
Official register of all land and the rights attached to it (ownership, mortgages, rights of way and residence). Kept by the local court.
Letter of Comfort Recht
Rare in tenancy law; usually a third party's declaration to stand in for liabilities. Common as security in commercial leases.
Living Area Calculation Bewertung
Determining the living area under the Living Area Ordinance (WoFlV) or DIN 277 — decisive for rent, price and cost statements.
Loan-to-Value (LTV) Finanzierung
Ratio of the loan amount to the lending or market value. A low LTV usually means better interest rates.
M
Maintenance Expense Steuer
Costs for repairs and upkeep that are immediately tax-deductible — unlike value-adding capital expenditure.
Maintenance Reserve Recht
Savings reserve of the owners' association for future repairs to the common property. Its level is important to check before buying.
Market Value Bewertung
The price achievable for a property in ordinary trade at the valuation date. Synonymous with the open-market value.
Mortgage Lending Value Bewertung
The value a bank considers durably safe for a property. Usually below market value and determines the possible loan amount.
N
Net Rent (Kaltmiete) Miete
The rent for use of the flat only, excluding operating and heating costs. The basis for yield calculations and rent-index comparisons.
Notary Escrow Account Recht
A notary's trust account used in special cases to handle the purchase price. Today usually replaced by direct payment after a due-date notice.
O
Open-Market Value (Verkehrswert) Bewertung
The legally defined market value of a property at a given date, determined by the comparison, income or asset-value method.
Operating Costs Miete
The running costs of a property: water, heating, waste, property tax, insurance and administration. Apportionable under the Operating Costs Ordinance.
Owners' Association (WEG) Recht
All owners of a residential complex. It decides jointly on the administration and maintenance of the common property.
P
Price-to-Rent Multiple Bewertung
Ratio of purchase price to annual net cold rent. A lower multiple means a higher running yield; values below 20 are considered attractive.
Principal Repayment Finanzierung
The repayment of the borrowed capital, separate from interest. A higher initial repayment rate markedly shortens the total term.
Priority Notice of Conveyance Recht
Entry in the land register that secures the buyer between contract and final transfer of title. Prevents double sales or new encumbrances.
Property Developer Bau
Company that builds on its own land and sells the finished property. Buyers acquire the land share and the construction in a single contract.
Property Financing Finanzierung
Umbrella term for financing the purchase, construction or modernisation of a property, usually via a mortgage-secured loan.
R
Real Estate Transfer Tax Steuer
One-off tax on property purchases, 5.5 % of the price in Saxony. Part of the ancillary costs and a precondition for the land-register entry.
Refurbishment Bau
Comprehensive repair and modernisation of a property to restore or raise its fabric, energy efficiency and living standard.
Rent Deposit Insurance Versicherung
An alternative to a cash deposit: the insurer guarantees towards the landlord while the tenant pays an annual premium instead of the full deposit.
Rent Index (Mietspiegel) Miete
An overview of customary local comparative rents in a municipality, compiled by the city and stakeholders. Key guidance for rent increases.
Right of First Refusal Recht
The right to step into a negotiated purchase contract when a property is sold. May belong to private parties (tenants) or the municipality.
Right of Withdrawal Recht
Consumers' right to revoke certain contracts (e.g. loan agreements) within 14 days without giving reasons.
S
Service Charge (Hausgeld) Recht
Monthly payment by a condominium owner to the association for operating costs, administration and the maintenance reserve.
Site Development Bau
Connecting a plot to road, water, sewage, electricity and telecommunications. Development costs are usually borne by the owner.
Special Repayment Finanzierung
A contractually agreed option to repay part of a loan ahead of schedule — shortening the term and saving interest.
Speculation Tax Steuer
Income tax on the gain from selling a non-owner-occupied property within ten years of purchase.
Standard Land Value Bewertung
Average, officially determined locational value of land per square metre, derived from actual sales. A reference for land prices.
U
Usable Floor Area Bewertung
The area of a building serving a specific purpose (e.g. commercial, storage), distinct from living and circulation areas.
Usufruct Recht
The right to use another's property comprehensively and draw its income without being the owner. Common in lifetime gifts.
V
Valuation Report Bewertung
A surveyor's written determination of a property's market value, e.g. for inheritance, divorce or financing.
