Long-term investors can potentially make over 300% capital gains return
The Berlin property market in Germany is booming! If you have ever owned and rented property in Berlin property for the last ten years or even self-occupied property for more than three years, now is an excellent time to sell. After this period, the so-called speculative tax is dropped which can be up to 40% savings in capital gains tax. Extraordinary high prices are being achieved for sellers and some getting over 300% capital growth.
Regulations such as rental price brakes and environmental protection have led to a huge shortage of available vacant properties in popular areas like Kreuzberg, Prenzlauer Berg, Mitte, Neukolln, Friedrichshain in the east and Charlottenburg, Wilmersdorf, Moabit, Friedenau and Steglitz in the west.
Investors who timed the market well who own one, two or three properties here, who are seeing excellent capital gain returns.
- A two-room 62 sqm Altbau apartment with balcony in Charlottenburg purchased for 90.000,00 euros in 2007 and sold for 280.000,00 – that is a capital growth of over 300%
- An open-plan duplex 1990’s 81 sqm penthouse apartment in Prenzlauer Berg purchased for 170.000 euros in 2008 and achieved an offer price of 450.000 – a 260% increase
- A one bedroom 54 sqm first-floor Altbau apartment near Bergmannkiez in Kreuzberg purchased by the current owner for 48.000,00 euros in 2006 and now valued at 240.000,00 euros – or an amazing 500% capital growth * All these properties were vacant or would become vacant at the point of purchase by a new owner. Similar properties sold with sitting tenants would be valued at approximately 30% less depending on the terms of the tenancy and current or potential rental yield.
What will increase the value of my property? Certain factors such as the location and condition, an appropriate layout, as well as the size and features can increase the value of a Berlin property tremendously. For example, two-bedroom apartments with 100 square meters of living space are hardly ever sought. The optimal apartment has, according to a recent study from a large German property portal, an average of 66 square meters and 2.5 rooms.
“In Berlin the situation for condominiums is crucial. If the apartment is in a trendy neighbourhood or near a specific location, the price can be much higher than the next block just around the corner. Similarly, the close connection to public transport plays a major role as well as the orientation of the apartment and its location within a multi-family house,” says Achim Amann, Director at Black Label Properties.
Source: Nicci Talbot, Black Label Properties