In the summer of 2022, we wrote that Germany was preparing a law banning real estate transactions for cash. And since the beginning of 2023, this law has already entered into force. Details are provided further down.

A new ban on cash and cryptocurrency payments when buying real estate has entered into force in Germany. Such measures are aimed at combating money laundering. 

What funds cannot be used when buying/exchanging real estate?

According to the new rules, it is not allowed to buy or exchange real estate in Germany for cash, cryptocurrency (including NFT), gold, platinum, or precious stones. 

What does not fall under this ban?

Securities, since they are not crypto-assets. This even applies to electronic securities that are registered in an electronic securities registry based on DLT technology. However, securities tokens that do not meet the criteria for «securities» will still be subject to the ban.

Payments with electronic money are also not prohibited. Therefore, PayPal and similar means of payment are not subject to the payment ban. This also applies to stablecoins, as they fall under the definition of electronic money.

The new ban applies to both individuals and businesses. Buyers and sellers will have to prove to the notary that the property was purchased by non-banned means and prove the bank payment. Among other things, appropriate evidence could include receipts of payment from the buyer’s or seller’s participating credit institutions in the transaction. 

What happens if one violates the ban?

Violating the ban on cash payments is not a criminal or administrative offense. However, it will generally be almost impossible to violate the ban.

The fact is that a notary is required to be present during the purchase of real estate, and only the notary can file an application to the Land Registry to transfer ownership of the property (on behalf of the parties). This in itself is intended to ensure that cash payments and other prohibited methods of payment do not appear in the transaction.

We also recently wrote about the fact that it is becoming increasingly difficult to buy a home in Germany. How much you need to earn to buy an apartment in German cities — read here.