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Buying a house: Who really owns the property?

Buying a house: Who really owns the property?

When buying a house, many people first think about the location, price, and condition of the property. One crucial factor is often overlooked: the land on which the house stands. From a legal standpoint, it is actually the central component of the purchase.

House and Land—Inseparably Linked

In Germany, the principle applies: “The land determines everything.” This means that a building is not legally a separate asset but is firmly attached to the land. When you buy a house, you generally also automatically acquire the land.

This rule is enshrined in the German Civil Code (Section 94 BGB): Buildings are so-called “essential components” of the land. Separate ownership is therefore only possible in special cases.

Who owns the land when buying a house?

1. Standard case: The buyer becomes the owner of both

After the notary appointment and the entry in the land registry, you are legally the owner—of both the house and the land.

Special cases you need to know about

2. Hereditary building right: The house belongs to you, but not the land

Typical terms: 50–99 years

Risk:

Important: A leasehold interest is then expressly noted in the land registry.

3. Partial ownership and condominium ownership

You are therefore a co-owner, not the sole owner, of the property.

4. Leasehold or Usufruct

Special caution is advised here, as these rights can significantly impact the value and use of the property.

Land Registry: The Most Important Source of Information

Section I

Section II

Section III

Practical tip: Always ask to see a current land registry extract or have it verified by a notary.

Common questions about the property

Does the property belong entirely to the house?
Yes, normally. Exception: Leasehold rights

Can you buy the house and the land separately?
Only under specific legal arrangements

Which is more important—the house or the land?
In the long term, the land is often more decisive for the value

Assessment: Why the land is so important

  1. Land value (usually increases)
  2. Building value (decreases over time)

Therefore:
Good location = land that retains its value

Checklist before buying

When buying a house, in most cases you’re not just buying four walls, but a piece of land—and that’s exactly what determines the actual value. The property belongs entirely to you, provided there is no leasehold or special circumstances. If you look closely here, you’ll avoid future problems and make a significantly better investment decision.

Leasehold rights in Munich: How common are they, and what should you watch out for?

In cities with very high land prices—especially in Munich—hereditary building rights play a significantly greater role than in rural areas. It is not the norm, but it is noticeably more common than the national average.

Why leasehold rights are more common in Munich

Large property owners are often involved:

How common is leasehold in Munich?

Real estate listings often include the note:
“House on leasehold land”

Typical terms in Munich

Example:
Property value: €800,000
Ground rent: 3% €24,000 annually

Advantages and disadvantages

Advantages

Disadvantages

Important factor: remaining term

At the end of the term:

Market trend

Leasehold is a relevant model in Munich’s real estate market. It can make sense if location is more important than ownership of the land and the terms are carefully reviewed. However, without analysis, it can lead to long-term disadvantages.