Top tips for moving to Germany
Top Five Financial Considerations When Moving to Germany
Are you considering moving to Germany? If so, congratulations! By this time next year you will be donning your Lederhosen, drinking a yard of beer at the Oktoberfest and will have sussed out that the infamous beer festival is not so aptly named, with the majority of the event taking place in September! Adjusting to life in any new country can take some getting used to and Germany is no exception. For example, Germans like to adhere to the rules and some of those rules can be a little crazy. So remember, keep the noise down between noon and 3pm – everyday! This is German quiet time so drilling, hammering or playing music will not be tolerated. Don’t wash your car on a Sunday, never ever run out of petrol and don’t tune your piano at midnight!
Abide by the rules at all times, aside from that, do what you like!
When upping sticks and moving across the globe there are always financial aspects to consider. In this article we have given our top five financial tips for people moving to Germany!
Finding Somewhere To Live
Unlike the UK, most people in Germany tend to rent their homes and with good reason. There is an abundance of high quality accommodation and rent for a 3 bedroomed detached house starts at about 1000 euros. Tenants in Germany are well protected by the law and landlords are unable to impose large rent increases. It is not unusual for tenancy agreements to extend to a five year period or sometimes even more. Of course, just like the UK, homes located in the city do come with a larger price tag. If you are looking to buy a property, you will find prices are slightly lower than the UK. The most expensive area to reside is Bavaria, especially in Munich. Whether you are a tenant or homeowner, you will need to clearly display your surname on your postbox- otherwise your letters will not be delivered.
If you are intending to stay and work in Germany for six months or more, you will be liable to pay tax in Germany. It is a legal requirement to declare your entire income to the German authorities, even if the income is originating from another country. Just as in the UK, German employees will pay tax monthly via a PAYE system. However if you are self employed you will need to pay on a quarterly basis. Remember that Germany has some of the highest tax rates, up to 44.3% on individual incomes.
If you are relocating as a family, then you may need to consider schooling options. Education in Germany is of a high standard and public schools do not charge. However many expats tend to send their children to the International Schools which cost upwards of £10,000 per year.
Banking and Paying
Whilst you will need to open a bank account in Germany, you may be surprised to find that the Germans still have a particular fondness for paying in cash. In fact the German word for debt, is also the German word for guilt, schuld. They have a very clear view about living beyond means and whilst mortgages are encouraged, many people actually own their own home outright. Opening a bank account is fairly straight-forward, but as with UK banks, fees can differ so make sure you shop around for the best deal.
Depending on your income you will need to take out either compulsory or private health insurance. Private health insurance is typically for those with a gross salary over 47, 350 euros. Whilst a compulsory health insurance will cover all your medical treatment, a stay in hospital will cost 10 euros a day, capped at a maximum of 28 days. Some treatments may require an upfront payment which can later be claimed back on the insurance. Partners and children that are not working will be included on your policy.