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Chapter 6 A Look at Germany

Chapter 6 A Look at Germany. Geography. Länder. Modern State of Germany. Old cities, towns, villages New country—I871 History entwined with other European countries 1945—split East and West 1990—united. Logistics Center of Europe. Major (3 rd ) economic sector

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Chapter 6 A Look at Germany

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  1. Chapter 6A Look at Germany

  2. Geography

  3. Länder

  4. Modern State of Germany • Old cities, towns, villages • New country—I871 • History entwined with other European countries • 1945—split East and West • 1990—united

  5. Logistics Center of Europe • Major (3rd) economic sector • 60,000 logistic companies , 8% of workforce and GDP • Seaports, roads, railways, freight hubs, inland waterways North Sea to Black Sea

  6. Dismantling socialist system, fostering capitalism, democracy • Privatizing property and restarting private enterprise—Treuhand • Unemployment and migration • Solidarity tax • Wall in the mind—Ossi and Wessi, Ostalgie Unified, still Divided?

  7. German Economy

  8. Real Estate Professionals • No federal or state licensing • Immobilienverband Deutschland (IVD) • Merger of Ring Deutscher Makler (RDM) and VerbandDeutscher Makler (VDM) • Membership requires qualification exam and proof of professional liability insurance

  9. Real Estate Transactions • Once-in-a-lifetime event, extended search • Makler conveys the offer to the seller • Notar prepares purchase contract • Buyer must demonstrate ability to pay • Priority notice in land register • Signing ceremony, funds placed in notar’s account • Notar applies for registration in Grunbuch • Seller receives payment when registration complete—about 40 days

  10. Lowest homeownership rate in the EU—only 40% • Post-War housing shortage • “Once a renter always a renter” • Low market turnover • Scarce , expensive land • High down payments Germany: Nation of Renters

  11. Rental laws favor tenant • Maximum 3 months’ deposit • Controls on rent increases • Landlord pays utilities • 3–9 months notice to remove a tenant • Tenant can refuse if undue hardship Germany: Pro Tenant

  12. Commercial Real Estate • Five cities contain most Class A space • Berlin, Hamburg, Düsseldorf, Frankfurt, Munich • Administrative centers • Bonn, Münster, and Wiesbaden • Essen • Information and technology, healthcare, insurance companies, corporate headquarters • East lags behind West, except Berlin • Risk-averse and conservative investors

  13. www.deutschland.de • www.bundesbank.de • www.destatis.de • www.germany-re.com • www.invest-in-germany.de • www.german-business-portal.info • www.dihlc.de • www.bfai.de Web Sites

  14. Judicial System • No trial by jury • Courts of Justice • Federal, Regional, Local • Criminal, Civil, Family cases • Specialized Courts • Administrative • Finance • Labor • Social

  15. Government • Basic Law : constitution established 1949 • President: head of state • Chancellor: head of government • Bundestag • Bundesrat • State (Länder) • Municipal (Gemeinden)

  16. Taxes-Taxes-Taxes • Tax residency: 183+ days over 2 years • Income tax: nonresident foreigners 25 – 45% • Solidarity tax: 5.5% surcharge on income tax, paid by West Germans • VAT: 19% • Capital gains tax: none on real estate owned 10+ years • Rental Income: 25% for non EU citizens • Television License: €17monthly fee

  17. Help desk: www.germantaxes.info

  18. Masters of planning • Values: order, structure, stability, discipline, responsibility, punctuality • Straightforward • Personal relationship not needed for business • Separate business and personal life • Great pride in their homes Beyond the Basics

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