Is it expensive to live in Germany?
Germany cost of living: How much does it cost to live in Germany?
Despite being by far the biggest economy in Europe and the fourth biggest economy in the world, with a skilled, educated and diverse workforce, Germany remains a relatively affordable place to live compared to other Western European countries.
According to the Organisation for Economic Co-operation and Development (OECD) Germany performs above average in many areas of well-being relative to other countries in its Better Life Index.
In particular it ranks above average in education, skills, work-life balance, jobs and earning, income and wealth, environmental qualities, social connections and health status.
It also ranks highly in civic engagement, housing, personal security and wellbeing.
Germany also has a higher than average national disposable income level ($34,297 compared to the OECD average of $33,604).
Obviously your own personal cost of living is dependent on where in Germany you live, as well as your personal lifestyle, but overall, Germany is considered affordable for most people whether you’re a professional looking to move alone or with a young family, or if you’re considering Germany as a retirement destination.
Cost of property in Germany
The cost of property in Germany depends a lot on where in the country you’re looking to buy, and some areas can be considerably more expensive than others - particularly if you’re looking for property in a city.
However, compared to other comparable countries, Germany has some of the more affordable house prices.
For example, according to the Global Property Guide the average square metre price of property in Germany is €5,907.
That’s significantly less than the UK €21,179 as well as EU countries like France (€12,796) and Italy (€6,589).
The German housing market has also remained strong over the past decade. According to Bundesbank, house prices in Germany rose at an average rate of 4% a year until 2015 before increasing to nearly 8%.
Even during the COVID-19 pandemic house prices have remained stable.
So if you’re looking for a longer term investment, Germany is a reliable market to be involved in.
In terms of where to buy property in Germany, Munich is typically the most expensive area to buy with square metre prices of around (€6,300).
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Looking to buy rental property?
If you’re looking to buy a rental property, you can expect rents of more than €2,250 for a typical apartment in Munich, down to around €1,500 in Berlin.
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Utility prices in Germany
Utility prices in Germany have stayed relatively stable in the past decade. On average Germans pay about €30 per kWh, according to Statista.
While overall, Germany is one of the more expensive countries for consumer electricity, there are subsidies available that make it more affordable.
Typically speaking you would expect to pay between €143 and €353 a month on utilities (electricity, heating, air conditioning, water and waste disposal).
For a fast, reliable WiFi connection you’d expect to pay between €25 and €49 depending on your chosen provider.
Public transport costs in Germany
The average cost for a monthly season ticket on German public transport is around €78, with slightly higher prices in Berlin (€81).
Hamburg has one of the highest monthly public transport costs at about €100 a month while Munich is about €55.
In terms of reliability, Germany has a range of public transport options for short-travel around a city, or longer journeys out into the suburbs.
These include rail services, buses and tram networks similar to those found in other major European cities.
As with any public transport, actual prices will vary depending on the nature of the individual journey.
Costs for healthcare in Germany
Germany has one of the best quality healthcare systems in the world based on a dual public and private system.
This is split between the public health insurance system and the private health insurance network. It’s a legal requirement to have some kind of health coverage so you’ll need to choose one option.
If you’re planning to work after buying a property in Germany, your employer will usually register you with a health insurance company or they’ll need proof of your insurance information if you’re planning to choose your own plan.
Currently the health insurance contribution rate is about 15% contribution from wages, which is split between an employer and an employee.
How much tax will you pay?
Germany operates a progressive tax system so what you pay is determined by what you earn.
In 2020, incomes from around €9,000 to €57,051 were taxed at rates between 14% and 42%. An income of €270,500 was also taxed at 42% with a higher rate of 45% for incomes over €270,500.
There is also a “solidarity charge” which is paid to cover the costs of integrating the states of the old East Germany. However, from this year 90% of taxpayers are expected to be removed from paying this surcharge.
There are also deductions and tax discounts that can be applied but these depend on your individual circumstances.
Ready to buy property in Germany?
As the top economy in Europe, home to some of the world’s biggest brands and with a large, skilled and diverse workforce, Germany remains one of the most popular investment areas for real estate and commercial property.
If you’re looking to make the move, click below to see some of the latest property that we have available.
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