Guide · Glossary
Real estate glossary from A to Z.
61 real estate terms, explained briefly and clearly.
A
- Certificate of self-containment (Abgeschlossenheitsbescheinigung)
- Certificate from the building authority confirming that a flat is structurally self-contained. A prerequisite for dividing a building into condominium ownership.
- AfA (tax depreciation)
- Absetzung für Abnutzung. The tax depreciation of the building value for let properties, usually 2 to 3 per cent per year.
- Sole agency agreement (Alleinauftrag)
- Agency agreement under which only one estate agent is entrusted with marketing for a set period.
- Annuity loan (Annuitätendarlehen)
- Loan with a constant instalment of interest and repayment. The repayment share increases over time.
- Follow-up financing (Anschlussfinanzierung)
- New financing of the remaining debt after the fixed interest period ends.
- Conveyance (Auflassung)
- The notarially certified agreement on the transfer of ownership of a plot of land.
- Priority notice of conveyance (Auflassungsvormerkung)
- Entry in the land register securing the buyer's claim to the transfer of ownership.
B
- Public easement (Baulast)
- Obligation of a landowner under public law. Saxony has no public easement register; corresponding rights are secured through servitudes.
- Commitment interest (Bereitstellungszinsen)
- Interest on a loan that has been approved but not yet drawn down.
- Client-pays principle (Bestellerprinzip)
- When residential property is let, the estate agent is paid by whoever commissioned them.
- Operating costs (Betriebskosten)
- Running costs of a building that can be passed on to tenants, such as property tax, water, waste collection and cleaning.
- Standard land value (Bodenrichtwert)
- Average land value in a zone, determined by the local valuation committee. In Saxony, available via BORIS Sachsen.
- Gross rental yield
- Annual net rent (excl. utilities) divided by the purchase price. A quick benchmark for investment properties.
C
- Cash flow
- Monthly surplus or shortfall of a let property after interest, repayment and costs.
D
- Denkmal-AfA (tax depreciation for listed buildings)
- Increased depreciation of eligible renovation costs for listed buildings under section 7i of the Income Tax Act (EStG), or section 10f for owner-occupiers.
- Servitude (Dienstbarkeit)
- A right of use over another party's land, entered in the land register, such as a right of way or a right to run utility lines.
E
- Personal use (Eigenbedarf)
- The landlord's legitimate interest in using the flat for themselves or relatives. Grounds for ordinary termination of a tenancy.
- Energy performance certificate
- Document on a building's energy efficiency. Required for every sale and letting, valid for ten years.
- Leasehold (Erbbaurecht)
- The right to own a building on land belonging to someone else. Ground rent (Erbbauzins) is paid in return.
- Community of heirs
- Several heirs who decide jointly about the estate.
- Certificate of inheritance (Erbschein)
- Proof issued by the probate court stating who the heir is.
- Maintenance reserve
- A reserve held by the owners' association for the upkeep and repair of the common property.
- Income approach
- Valuation method that derives a property's value from the income it can sustainably generate.
- Property brochure (exposé)
- Detailed property brochure with photos, floor plans and all key data.
F
- Forward loan
- A loan that lets you secure today's interest rate for future follow-up financing.
G
- Building Modernisation Act
- Law in force since July 2026 that replaces the Building Energy Act (GEG) and sets the requirements for heating systems and buildings.
- Common property
- Parts of a residential complex owned jointly by all owners, such as the roof, façade and stairwell.
- Land register
- Public register kept at the local court recording ownership, rights and encumbrances on land.
- Real estate transfer tax (Grunderwerbsteuer)
- Tax payable on the purchase of land. In Saxony 5.5% of the purchase price.
- Land charge (Grundschuld)
- A charge entered in the land register (Grundbuch), usually to secure a mortgage loan.
- Valuation committee (Gutachterausschuss)
- Independent body that analyses purchase prices, sets standard land values and publishes market reports.
H
- Service charge (Hausgeld)
- Monthly advance payment by a flat owner to the owners' association.
I
- Index-linked rent
- Rent that follows the development of the consumer price index.
K
- Rent increase cap (Kappungsgrenze)
- Upper limit for rent increases towards the local comparative rent. In Dresden currently 15% within three years.
- Purchase price multiplier
- Purchase price divided by the annual net rent (excl. utilities).
- Deposit
- Security provided by the tenant, at most three months' net rent (excl. utilities).
L
- Deletion consent
- The bank's declaration that a land charge may be deleted from the land register (Grundbuch).
M
- MaBV
- Estate Agents and Developers Ordinance. Among other things, it governs instalment payments according to construction progress when buying from a developer.
- Estate agent's commission
- The estate agent's fee for a successful sale. For flats and single-family houses it is shared between buyer and seller.
- Rent cap (Mietpreisbremse)
- Limits the rent for new tenancies to, as a rule, 10% above the local comparative rent. Applies in Dresden.
- Rent index (Mietspiegel)
- Overview of the local comparative rent. Dresden has a qualified rent index.
- Co-ownership share
- A flat owner's share of the common property, usually expressed in thousandths.
N
- Net rental yield
- Yield after deducting non-recoverable costs, based on the purchase price plus acquisition costs.
- Usufruct (Nießbrauch)
- The right to use someone else's property and take its income, such as rent.
- Notary escrow account
- The notary's trust account, used in exceptional cases to settle the purchase price.
O
- Off-market
- A sale without public advertising, offered only to selected prospective buyers.
S
- Cost approach
- Valuation method that adds the land value and the building value.
- Separate ownership (Sondereigentum)
- The flat itself, with everything that serves only its owner.
- Exclusive right of use
- The sole right to use part of the common property, such as a garden or parking space.
- Special levy
- An additional payment by the owners when the reserve does not cover a measure.
- Speculation period
- Ten-year period after which the gain from selling a private property is tax-free.
- Graduated rent
- Rent with future increases fixed in the tenancy agreement.
T
- Declaration of division (Teilungserklärung)
- The founding document of an owners' association, defining separate and common property.
U
- Handover report
- Record of meter readings, keys and condition when a property is handed over.
V
- Sales comparison approach
- Valuation method based on actual sale prices of comparable properties.
- Market value
- The price that could be achieved in the ordinary course of business on the valuation date.
- Early repayment charge
- Compensation the bank may demand when a loan is repaid early.
- Right of first refusal
- The right to step into a concluded purchase contract on the same terms, for example for tenants or the municipality.
W
- Living Space Ordinance
- Sets out how living space is calculated, for example the partial inclusion of balconies and sloping ceilings.
- Right of residence
- A right, secured in the land register (Grundbuch), to live in a flat.
Z
- Fixed interest period
- The period for which a loan's interest rate is fixed.
Guide
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