Though the two neighbouring countries may share a language, there are plenty of differences between Germany and Austria that may confuse foreigners trying to decide which country to live in.

Though the Alpine country down south has a lot in common with Bavaria, some parts of Germany are a far cry from the soaring mountains and crystalline lakes of Austria, with a much more varied (and often flatter) landscape. What’s more, each country has its own unique culture, economy and set of rules for foreigners to get their heads around.

If you’re wondering which country is the best to live in, you might be interested in checking out our recent comparison below:

Austria vs Germany: Which country is better to move to?

But if you’re planning on relocating and buying your own place – or possibly wondering which country is best for investing in property – these are some of the key differences to consider. 

Price 

Despite the difference in size between Germany and Austria, it’s worth noting that both countries see a huge amount of regional variation in house and flat prices.

In Austria, for instance, the northern state of Tirol – where Innsbruck is located – tends to have some of the highest property prices in the country. Here, flats can cost around €8,500 per square metre, while houses cost around €7,770 per square metre – and it’s not unusual for properties to go for millions. In the popular ski resort of Kitzbühel, for instance, you can expect to pay as much as €16,000 per square metre for a house. 

As you might expect, prices in Vienna are also among the highest in the country, followed by the states of Vorarlberg and Salzburg. You can expect to shell out around €5,000 to €6,000 per square metre for properties in these areas. 

On the lower end of the scale, Burgenland – Austria’s easternmost state bordering Hungary – has the lowest prices in the country, averaging out at €1,900 per square metre for flats and €2,000 per square metre for houses.

READ ALSO: Can foreigners buy property in Austria?

As you might expect for such a large country, regional differences are equally pronounced, and the highest prices tend to be found in major cities such as Munich, Berlin and Frankfurt. 

The Bavarian capital of Munich in particular is known for its eye-wateringly high prices, with flats and properties here costing a solid €9,000 to €10,000 per square metre. That said, Berlin is catching up rapidly, and buyers here may find themselves paying as much €7,700 per square metre for a flat in a central location these days. 

In the banking hub of Frankfurt, meanwhile, paying €6,500 per square metre isn’t uncommon. 

Cheaper districts (and cities) in Germany include the former eastern states, such as Saxony, Saxony-Anhalt and Thuringia. Here, prices tend be below €3,000 per square metre on average – though there are still differences between urban and rural areas. 

On average, buyers shell out around €4,235 per square metre for properties in Germany, with median flat and house prices coming in at €325,000 and €530,000 respectively. 

Additional costs 

When it comes to both Austria and Germany, the process of buying a house can be full of bureaucratic pitfalls and confusing rules. However, purchasing a house in Austria tends to involve a little more paperwork and patience than in Germany.

Buying property in either country also comes with a range of hidden fees, mostly in the form of administrative fees and taxes such as property transfer tax, notary fees, translators’ and interpreters’ fees and commission for estate agents. 

In Austria, you’ll generally pay 3.5 percent of the property price in property transfer tax upon purchase, pay to enter the property and mortgage into the land register (2.3 percent of property price) and pay for a contract to be drawn up, which can cost between one and three percent. On top of this, you may have to pay commission of around three percent to your estate agent. 

In Germany, meanwhile, property taxes vary from state to state and can be anywhere between 3.5 and 6.5 percent. You’ll also have to factor in around 1.5 percent on top of that for a notary to draw up the contract between the seller and buyer and enter your purchase into the land registry. Then, you may have to factor in some commission for your estate agent, which also varies regionally from around 3 to 3.5 percent.

Unlike in some countries like the UK, though, you rarely face excessive legal costs for lawyers to represent you as the notary acts as the neutral mediator between the two parties and should ensure the contract is air-tight.  

For more information on these additional costs, see our explainers below:

• EXPLAINED: The hidden costs of buying a house in Germany
• The hidden costs of buying a home in Austria

If you see property more as an investment – or a business opportunity – then it’s also worth being aware that both countries have relatively high capital gains tax to disincentivise the practice of ‘flipping’ houses in a short space of time.

Hurdles for foreigners 

Buying a property isn’t just about whether you can afford it: it’s also about the rules and red-tape you may have to navigate.

In Austria, for example, there are key restrictions on so-called third-country nationals – i.e. non-EU citizens – buying property in the country. In general, if you fall into this category, you will only be able to buy a house or flat if you have a permanent residence permit. However, the rules do vary slightly from state to state.

If you’re an EU citizen, you generally have the same rights as Austrian citizens, though there are still some restrictions on foreigners buying second homes in the some regions of the country – and particularly close to the German border.

In Germany, meanwhile, these restrictions don’t apply. As a foreigner, you’re entitled to buy property in the country regardless of your immigration status, and can buy houses or flats either to live in yourself or for the purpose of renting them out. If it’s the latter, you’ll even get perks such as lower purchase prices and zero percent commission. 

Another difficulty for foreigners in Austria are the new tighter restrictions on giving out mortgages. Buyers now generally need to put down 20 percent of the purchase price in the form of a deposit, and mortgages can generally last no more than 35 years or exceed 40 percent of a buyer’s household income. 

READ ALSO: 

• Is it better to buy or rent in Germany right now?
• Property buying rules for international residents in Vienna

In Germany, things are a bit less strict, but do depend a fair bit on whether you’re a long-term resident. If you are, you may even  be able to get a mortgage covering 100 percent of a property’s value. If you don’t live or work in Germany, only up to 60 percent is possible.

Mortgage repayments also can’t exceed more than 35 percent of a buyer’s net income, so high earners are obviously at an advantage here.

It’s also fairly common knowledge that non-permanant residents may find it slightly harder to get mortgages, so that’s something to be aware of too. 

Of course, the language barrier can also be a major issue for internationals, though these days there are far more websites and resources geared to foreigners that can help you in your search, as well as specialised estate agents.