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REVEALED: Which German cities have the most millionaires?

New research has shown how Germany's millionaires are distributed throughout the country, with one city coming out on top - and it might not be where you expect.

Published: 3 August 2023 16:19 CEST
Two people toast with champagne on a beach.
Two people toast with champagne on a beach. Photo: Pixabay/Pexels

Of the approximately 46 million working people in Germany, nearly 30,000 earn more than €1 million per year. While these high-income earners are spread out across the country, a recent analysis by the Handelsblatt Research Institute has shown how unevenly distributed they are. 

The study, conducted using income tax returns for the year 2019, found that there were 27,300 income millionaires in the year under review, marking an increase of about 1,200 compared to 2018. As tax returns are often prepared and audited several years later, the 2019 data is the most recent available.

READ ALSO: REVEALED: Where in Germany people earn the most (and least)

In the list of cities with the most millionaires per 100,000 people, Düsseldorf came out on top, with 172 millionaires per 100,000 taxpayers. 

While the figures don’t explain why so many high-earners choose to live in Düsseldorf, the city’s strong economy and business-friendly environment, its proximity to the Rhine and its rich cultural and leisure offerings – as well as its reputation as a place for high fashion – likely contribute to its popularity. 

North Rhine-Westphalia’s second most populous city pipped the Bavarian capital Munich to the post, where there were 170 millionaires per 100,000 taxpayers. Baden-Württemberg’s capital Stuttgart came in third place, with 142 per 100,000.

At the state level, Hamburg tops the list of the federal states with the most millionaires, with 124 per 100,000 taxpayers. 

Meanwhile, Bavaria, known for its picturesque landscapes and mountains, experienced a surge in the number of millionaires, reaching 90 millionaires per 100,000 taxpayers, up from just 49 in 2015.

On the other end of the spectrum, the five eastern federal states – Brandenburg, Saxony, Saxony-Anhalt, Thuringia and Mecklenburg Western Pomerania –  continue to rank at the bottom in terms of millionaire density.

Berlin saw the largest increase in millionaire concentration among the federal states within a year: the capital city gained around seven millionaires per 100,000 taxpayers, moving up two places to claim the sixth place. Schleswig-Holstein (plus six) and Bavaria (plus three) also saw notable increases.

READ ALSO: Germany ranks third worldwide in number of ‘ultra-rich’ residents

A completely different picture emerged when looking at the number of millionaires in smaller districts and urban areas.

Starnberg in Bavaria, located near Munich and the Alps, had by far the most millionaires, with 428 top earners per 100,000 taxpayers. Following closely was the Hochtaunus district near Frankfurt, which is home to many of the Hessian city’s top bankers.

The Alps and the Zugspitze can be seen in the background of Lake Starnberg. Starnberg is the district with the most millionaires in Germany. Photo: picture alliance/dpa | Sven Hoppe

Eight out of the top ten districts and cities with the highest density of income millionaires are found in southern Germany. These include Starnberg, Miesbach, Memmingen, and Landshut in Bavaria, as well as Baden-Baden and Heidelberg in Baden-Württemberg. 

How rich are Germans in general?

One prominent study that looks into the finances of private households in Germany is the “Private Haushalte und ihre Finanzen” –  Private Households and Their Finances – which is conducted by the Bundesbank every three years.

The survey includes assets such as real estate, vehicles, bank deposits, and private pension and life insurance claims, as well as debts like mortgages and loans. The latest survey in 2021 reported that German households reached an average net wealth of €316,500, a record high over the past decade. Notably, between 2017 and 2021, average wealth surged by 36 percent.

The study also highlighted a significant rise in the median net wealth, i.e. the number between the highest and the lowest net worth. In 2021, the median net wealth was €106,600 – a dramatic increase of over 100 percent from 2011, when the median stood at €51,400.

The disparities between the average and median figures also reveal the uneven distribution of wealth: to belong to the wealthiest 10 percent of households, households need to have net wealth of at least €725,900.

READ ALSO: How much do you have to make to be considered rich in Germany?

On a broader scale, the “Sozio-oekonomisches Panel” – Socio-Economic Panel – conducted by the German Institute for Economic Research (DIW) annually surveys nearly 30,000 individuals from approximately 15,000 households. The report from 2019, using SOEP data for 2017, revealed an average individual net wealth of €108,449. In stark contrast, the median value stood at €26,260 – significantly lower than the average.

The DIW report also showed an encouraging trend in Germany’s wealth landscape as, between 2012 and 2017, the average net wealth per person increased by nearly 22 percent. 

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PROPERTY

Who pays broker’s fees on property in Germany – and how much do they cost?

One of the major hidden costs of buying and selling property in Germany is the estate agent's commission, or broker's fee. We look at some of the unusual rules around it - and how much you can expect to pay.

Published: 17 September 2024 16:25 CEST
Who pays broker's fees on property in Germany - and how much do they cost?

There are many areas of life in which things in Germany function just that little bit differently – and buying a house is no exception.

Though the buoyant property market in the Bundesrepublik makes it an attractive place to buy, anyone looking to get their foot on the housing ladder should consider the hidden fees they might incur.

Beyond interest rates, taxes and fees for notaries and translators, one major outlay is the estate agent’s commission, which can sometimes stretch to thousands of euros.

Here’s what to know about these hefty fees and how you might be able to lower them. 

Who pays commission on property transactions in Germany?

If you come from another European country or somewhere like the United States, you may be used to a system in which the seller pays the broker’s fee. This intuitively makes sense because the estate agent is there to market the property, liaise with buyers and ultimately get the best price for the seller – so it makes sense that the seller should pay for these services.

Until recently, however, it was the buyer who was responsible for paying the entirety of the estate agent’s commission in Germany. That meant that these fees – which could be as high as seven percent of the purchase cost – were added to the mountain of extra costs buyers had to contend with, from notary fees to land transfer tax.

READ ALSO: The hidden costs of buying a house in Germany

Luckily for buyers (but less so for sellers), this was changed under a law that came into force at the end of 2020. Since then, costs are generally split 50/50 between buyers and sellers.

However, there are some details that are important to note here. If the seller commissions the estate agent to help them sell their home, they are technically liable for the costs but must pay a minimum of 50 percent. 

If the buyer commissions the estate agent to find them a home, the same rules apply the other way around: the buyer is liable for the costs but can obtain a maximum of 50 percent from the seller.

In each case, the side that commissioned the broker must prove they have paid their share before the other side is liable to pay theirs. 

How much do estate agents’ fees cost in Germany?

Commission on property sales varies from state to state but is generally set at between 5 and 7 percent of the purchase price.

According to online portal ImmobilienScout24, these were the standard rates that applied in each of the federal states in 2024, with the number in brackets representing a 50 percent share of the costs:

Baden-Württemberg: 7.14 percent (3.57 percent)

Bavaria: 7.14 percent (3.57 percent)

Berlin: 7.14 percent (3.57 percent)

Brandenburg: 7.14 percent (3.57 percent)

Bremen: 5.95 percent (2.97 percent)

Hamburg: 6.25 percent (3.12 percent)

Hesse: 5.95 percent (2.97 percent)

Lower Saxony: 4.76 – 5,95 percent or 7.14 percent, depending on the region. (2.38 – 3.57 percent)

Mecklenburg Western-Pomerania: 5.95 percent (2.97 percent)

North Rhine-Westphalia: 7.14 percent (3.57 percent)

Rhineland-Palatinate: 7.14 percent (3.57 percent)

Saarland: 7.14 percent (3.57 percent)

Saxony: 7.14 percent (3.57 percent)

Saxony-Anhalt: 7.14 percent (3.57 percent)

Schleswig-Holstein: 7.14 percent (3.57 percent)

Thuringia: 7.14 percent (3.57 percent)

If it’s hard to gauge how much this means in real terms, we can take the example of two properties: a €200,000 apartment and a €500,000 family home.

In the state of Hesse, a buyer splitting the broker’s fee equally with the seller would pay €5,940 to buy the €200,000 apartment and €14,850 to buy the €500,000 house.

In pricier Berlin, meanwhile, the same buyer would pay €7,140 on the €200,000 apartment and €17,850 on the €500,000 house.

READ ALSO: Is autumn 2024 the right time to buy a property in Germany?

Here’s where it gets more complicated, however: under German law, you are technically free to negotiate the commission with your estate agent.

That means that, especially in areas with stiff competition, you may be able to secure a better deal. 

Do I always have to pay commission in Germany? 

Not always. In fact, as a seller, you’re perfectly free to sell your property privately without enlisting the help of a real estate agent.

The benefit of this, of course, is that you can potentially save thousands of euros in fees, both for yourself and any prospective buyer. 

On the flip side, though, you will need to take the entire job of the estate agent on yourself, from marketing the property to liaising with potential buyers and finally closing the deal.

Real estate agent Germany

A real estate agent talks to prospective tenants at an apartment viewing. Photo: picture alliance/dpa | Tobias Hase

There can also be some upfront costs involved in commissioning things like floor plans and professional photography, as well as the time you’ll need to invest in learning all the procedures and preparing relevant documents for notary – to name just a few examples.

Ultimately, though, it’s up to you to decide whether the expense of working with a professional broker is worth it in the end. 

As a buyer, there are also some situations where you’ll see the words ‘provisionsfrei’ – or commission-free – written in a property listing.

This is fairly common in new-build properties, where the developer may sell the homes directly to interested buyers. More rarely, an existing property may be listed without commission, making it a more attractive proposition.

In both cases, it’s possible that commission has been built into the purchase price, so you may not necessarily be getting a better deal.

Another case where you’re likely to be able to avoid commission as a buyer are so-called Kapitalanlagen – or buy-to-let properties. 

READ ALSO: Should you think about purchasing a buy-to-let property in Germany?

These tenanted properties are designed to be bought as investments: buyers can enjoy additional rental income over time and, ideally, will also make money when they come to sell the property several years later.

For this reason, costs are generally kept slightly lower for the buyer by eschewing the standard broker’s commission. 

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