Guide · Financing

Land charge (Grundschuld) on a German home: creation, cost

What a Grundschuld is, how it differs from a Hypothek, how it is created and deleted in the Grundbuch, and the GNotKG fees, calculated on a €300,000 charge.

Checked on against the official sources at the bottom of the page.

In short

A Grundschuld (land charge) is the right, entered in the Grundbuch (land register), that lets a lender have a fixed sum paid out of your property. It is the normal security for a German home loan. On a €300,000 charge the notary fee is €635 plus 19% VAT and the registry fee €635 (calculation under the GNotKG, Tabelle B). The cost schedule is federal law, so these amounts do not vary by state.

What the Code says

Section 1191 of the Civil Code (BGB) lets a plot be burdened so that a fixed sum of money is to be paid out of it to the beneficiary. Interest on that sum and other ancillary payments can be added. Section 1192 applies the rules on the Hypothek by analogy, except where they depend on a claim, because the Grundschuld does not presuppose a claim.

That is the central difference. A Hypothek is a charge to secure a specific claim (section 1113 BGB) and follows it. A Grundschuld stands on its own. A Grundschuld given as security (Sicherungsgrundschuld) comes with a security agreement that says which debts it secures. Section 1192(1a) BGB provides that defences you have against the lender under that agreement can also be raised against anyone who later acquires the charge. In practice this means you should read the security agreement, not only the loan contract.

How it is created

A land charge needs two things: an agreement between owner and beneficiary and its entry in the land register (section 873 BGB). The parties are bound before the entry only if their declarations are notarised, made before the registry, or if the owner has handed the beneficiary a registrable entry consent. Under the Grundbuchordnung (section 19 GBO) an entry is made when the person whose right is affected consents to it.

A notary usually records the owner’s declaration. That deed can include a submission to immediate enforcement, which section 800 of the Code of Civil Procedure (ZPO) allows against whoever is the owner at the time; the submission must itself be entered in the register. Enforcement of the charge happens through compulsory execution (section 1147 BGB).

Two forms exist, according to the registry fee table. The Buchgrundschuld is entered only in the register. The Briefgrundschuld also has a certificate. The registry fee for the second is higher: 1.3 instead of 1.0 (GNotKG 14120 and 14121).

The notice period of the charge itself

Section 1193 BGB: the capital of a land charge falls due only after notice, which either owner or beneficiary can give, with a period of six months. Where the charge secures a money claim, a different period in the documents is not permitted. This is separate from the borrower’s rights under the loan contract; see the guide on fixed-rate periods.

When the loan is repaid

Because a Grundschuld does not depend on a claim, repaying the loan does not remove the entry. Under section 27 GBO a land charge can be deleted only with the owner’s consent. In addition, the beneficiary’s deletion consent is needed (section 19 GBO). What the lender must hand over, and when, is governed by the security agreement. The guide on early repayment covers the compensation a lender may claim.

What it costs

Notary and registry fees come from the GNotKG. The value is the nominal amount of the charge. As a calculation for a €300,000 charge, with Tabelle B at €635 for that value:

StepRateCalculationAmount
Notary: recording the charge (KV 21200, minimum €60)1.01.0 × €635€635.00
VAT on the notary fee (19%)€120.65
Registry: entry of the charge (KV 14121)1.01.0 × €635€635.00
Total€1,390.65

VAT applies to the notary’s fee under item 32014; the 19% rate comes from section 12(1) of the VAT act. The cost table has no VAT line for the registry’s fees. If a paper certificate is issued, the registry rate is 1.3 (KV 14120). Other notary lines, such as certificate requests, may be added on top; the guide on notary and land registry fees shows how.

Deleting the same €300,000 charge, as a calculation:

  • Registry deletion in Abteilung III: 0.5 × €635 = €317.50 (KV 14140).
  • Notary, where the owner’s consent to deletion is recorded: 0.5, minimum €30 (KV 21201 no. 4), so 0.5 × €635 = €317.50 plus 19% VAT.

What this means for a purchase

A home buyer with a bank loan has the charge recorded by a notary. The land charge is part of total buying costs. A seller who has an old charge on the property deals with its deletion at sale; see selling a home in Germany.

Which professional to consult

The notary records the charge and explains the clauses you sign (see the notary page). A mortgage broker can explain the lender’s security agreement (see the mortgage-broker page). Payotte does not rank notaries.

Frequently asked questions

Is a Grundschuld the same as a mortgage?

In everyday use, yes. In law, a Hypothek depends on a claim and a Grundschuld does not (sections 1113 and 1192 BGB). Home loans are usually secured by a Grundschuld.

Does the charge disappear when I repay the loan?

Not by itself. It stays in the register until it is deleted, which needs the owner’s consent (section 27 GBO).

Who pays the notary and registry for the charge?

This guide found no statutory rule on how the charge’s costs are split between you and the lender, so it depends on the documents. For the purchase itself, the buyer bears the costs of the deed, the register entry and the declarations needed for it by default (section 448(2) BGB).

Can a lender sell my home if I default?

Through compulsory execution of the charge (section 1147 BGB); enforcement against the current owner is possible where the submission clause was entered (section 800 ZPO).

What is a Briefgrundschuld?

A land charge with an issued certificate; the registry fee is 1.3 against 1.0 for the book form.

General information drawn from the official sources cited and dated on this page. It is not legal, tax or financial advice: for your own situation, ask a licensed professional.

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Sources

All guides · Payotte Germany