Property in Munich and South Germany for foreign buyers

South Germany combines the strongest regional economies in the country with the highest property prices. Munich is the most expensive large city; Augsburg and Nuremberg in Bavaria and Stuttgart in Baden-Wuerttemberg are cheaper alternatives with their own employers and universities. Foreigners do not need a special permit to buy a flat in Germany in general, but the tax, the letting rules and the price level differ by city and state. This guide is as of October 2026 and complements Germany property prices and buying costs.

Prices: Munich against the rest of the south

All figures are asking prices per m2 reported by portals and brokers, not registered transaction prices; they are indicative and transaction prices are usually lower.

• Munich: a broker market report puts existing flats at roughly 8,000-8,700 EUR per m2 and new builds at roughly 10,500-13,500 EUR per m2 in mid-2026. The same source describes a correction from 2022 to 2024 and rising prices again since 2025. Treat it as one reading of the market, and compare with the Munich valuation committee data.
• Stuttgart: about 4,400 EUR per m2 asking in February 2026, slightly below the previous year according to a regional press summary.
• Nuremberg and Augsburg: reported to be clearly cheaper than Munich in the second half of 2025. We could not confirm a reliable per-m2 figure for either city, so we do not quote one; check the current report of the local valuation committee.

For a first filter, the distance to Munich matters: suburbs and commuter towns around it can be considerably cheaper than the city, but the S-Bahn or train connection decides whether a flat is easy to let. See best areas to buy property in Germany.

Transfer tax: Bavaria against Baden-Wuerttemberg

The real estate transfer tax (Grunderwerbsteuer) is set by each federal state:

• Bavaria (Munich, Augsburg, Nuremberg): 3.5% of the price, the lowest rate in Germany.
• Baden-Wuerttemberg (Stuttgart): 5%.

For comparison, Berlin charges 6%. On a 500,000 EUR purchase, as an illustration only, the difference between 3.5% and 5% is 7,500 EUR. Add the notary and land register fees, about 1.5-2% of the price, and an agent commission if one was used. Since December 2020 the buyer can be charged at most half of the agent commission on a flat or single-family home. The tax rate of the state where the property is located applies, not the rate where you live.

Zweckentfremdung: letting rules in Munich

Munich has a ban on misuse of housing (Zweckentfremdungsverbot). Under the city's rules, using residential space for other than residential purposes needs a permit. In particular, the city treats using a flat as a holiday flat for more than 8 weeks per calendar year as misuse. A permit can be granted, for example if replacement housing is provided or against a compensation payment. See the City of Munich information. For you as a buyer this means:

• Do not buy a flat in Munich for short-term tourist rental without checking the rule and getting written advice.
• If the flat is currently let as a holiday flat, ask the seller for proof that it is permitted.
• Plan for long-term letting or own use, and check separately whether the rent brake applies in the municipality. See short-term rental rules in Germany.

Other cities have their own rules; ask a local lawyer before buying anywhere.

Checks before you sign in the south

• Ask for the owners' association documents (Teilungserklärung, last protocols, maintenance reserve) as described in our resale property checklist.
• Compare the asking price with the valuation committee's data for the street; in a market that corrected from 2022 to 2024, sellers' expectations and actual prices can still differ.
• Check energy efficiency, heating type and planned works, because these affect the monthly charge and the resale value.
• Read the draft contract at least a few days before the notary appointment; in Germany the notary sends it in advance.

Which city fits which goal

• Own use or long-term hold: Munich offers a deep rental market and liquidity but a high entry price. Stuttgart is a high-wage market with a lower price level.
• Lower entry ticket: Augsburg and Nuremberg, where the rent and price figures need a local check.
• Investment: the rent brake and local rent tables limit what you can charge in many cities; see rental yield and investment in Germany.

For Russian-speaking buyers and expats

Russian-speaking communities exist in Munich, Stuttgart and Nuremberg, and Russian-language lawyers, tax advisers and agents work in these cities. Practical points:

• The notary must be sure you understand the contract; if your German is limited, plan an interpreter or a translation and agree this with the notary beforehand.
• Prepare a passport, proof of address, a German tax ID and proof of where the funds come from. Banks and notaries run anti-money-laundering checks; lawful compliance is not optional.
• Foreign documents may need an apostille and a sworn translation.
• Do not pay anything before the notarised contract, and do not rely on a verbal agreement.
• A mortgage for non-residents is possible but depends on the bank; see mortgage for foreigners in Germany.

FAQ

Is property in Munich cheaper than Berlin? No. On the asking prices we found, Munich is clearly higher than Berlin; Stuttgart is closer to the Berlin average.

How much is the transfer tax in Bavaria? 3.5% of the price in 2026. In Baden-Wuerttemberg it is 5%.

Can I use a Munich flat as a holiday rental? Only within the misuse rules; more than 8 weeks per year as a holiday flat is treated as misuse and needs a permit. Ask the city authority before you buy.

Do I need a permit as a foreign buyer? In general, no special permit for a flat. Confirm your case with the notary.

Is Nuremberg or Augsburg a better choice than Munich? They are cheaper, but liquidity and rent levels differ. Compare with local data before deciding.

How we help

We are a trilingual platform (English, Russian, Polish) that finds properties and coordinates independent local lawyers and tax advisers; we do not give legal or tax advice. This text is informational and not legal, tax or investment advice. Rules change, so verify current rules with a notary and a tax adviser. You can browse listings in Germany and try our calculators.