How has the property market in the new German states performed over recent years?
In the six or seven years that followed German reunification in 1989, property prices increased by some 40%, before dropping back to their original level. Rents also dropped but not by as much, creating a situation of rental yields at an all time high with interest rates at an historical low. Prices have been fairly stable since 2003. The German property market is not driven by wild speculation. Due to this fact the asset volatility is very low in Germany. How much tax do I have to pay? Income generated in Germany is taxed in Germany. Although income tax rates are marginally higher than in the UK, there are substantial (virtual) expenses that can be deducted from your income (e.g. building depreciation) which will reduce your tax bill to below what you would pay for an equivalent property in the UK. However, if you repatriate money to the UK you will have to pay UK taxes. The taxes you have already paid in Germany would then be refunded, as there is a double taxation agreement between
