Guide
Strategies for owners and investors
Guide 2020: how to sell your apartment in Berlin successfully
Selling a property in Berlin requires careful planning. We summarise the key steps: from tax preparation and pricing to the new broker commission rules.
Peter Guthmann
Berlin's property market remains dynamic in 2020. Anyone who bought a condominium in the capital ten years ago has seen a remarkable appreciation. Prices have risen by more than 200 per cent over that period. A typical pre-war apartment that changed hands at around 1,590 EUR/sqm in 2010 now trades at over 4,000 EUR/sqm, and significantly more in sought-after locations.
A sale is the opportunity to realise that value. The process has pitfalls, however, that owners and investors should be aware of.
Preparation: taxes and financing
A successful apartment sale begins well before the first viewing. Two aspects are central: the tax situation and existing bank loans.
For investment owners, the ten-year speculation period applies. Selling before that period ends means the capital gain is taxable. Owner-occupiers may be exempt under certain conditions. Early consultation with a tax adviser helps minimise the individual burden.
If the property's financing is still running, the bank may charge a prepayment penalty for early loan termination. The amount should be clarified in good time, and the land-charge deletion consent obtained from the bank to avoid delaying the notary appointment.
Pricing: what is your property worth?
The most important question for sellers: "What is my property worth?" Relying solely on asking prices of comparable properties on online portals is misleading, as these often reflect sellers' expectations rather than actual values. A realistic property valuation takes market trends and notarised sale prices in the immediate neighbourhood into account.
A price set too high deters potential buyers and leads to long marketing periods. A price set too low leaves money on the table. The "right" price is one that attracts enough qualified buyers to create competition. The price range for apartments in Berlin depends heavily on location and condition; prices in Mitte are worlds apart from those in outer boroughs.
Complete documentation as a foundation
A professional sales process relies on transparency. Buyers and financing banks need a range of documents: energy certificate, declaration of division, owners' meeting minutes and service-charge statements. Owners who let their apartment and do not live locally often do not have these documents to hand. Missing or incomplete paperwork causes delays and can undermine buyer confidence.
New commission rules from December 2020
From 23 December 2020, the "Law on the Distribution of Broker Costs" took effect. In future, the broker's commission will typically be split equally between buyer and seller. This strengthens the broker's role as an intermediary who serves both parties and ensures a secure, transparent sales process.