Capital: München

Bavaria

Bavaria is Germany's largest state by area and has the lowest property transfer tax rate in the country at 3.5%.

Last updated: October 28, 2026
Editorially reviewed

Transfer Tax: 3.5%; €10,500 on €300,000
Asking price/m² (median): €5,385
Cold rent/m² (median): €14.29
Gross rental yield (median): 3.2%; No. 13 of 16 states

Asking prices and rents from online listings for apartments, as of November 4, 2026. Not notarised sale prices.

Bavaria is the only German state that still applies the 3.5% property transfer tax rate set in federal law. That keeps acquisition costs below those in every other state. At the end of 2025 about 13.2 million people lived in Bavaria, and with a GDP of 824 billion euros (2025) it has the second-largest economy of the German states after North Rhine-Westphalia. The market runs from Munich to cities such as Nürnberg, Augsburg, Regensburg and Würzburg. You can see purchase prices, rents and gross yield for Bavaria in the live figures at the top of this page.

Real Estate Market

Major industries in Bavaria include the car industry, technology, aerospace and tourism. Munich is Germany's most expensive housing market. Nürnberg has much lower purchase prices. In September 2026 Bavaria had the lowest unemployment rate of all German states, at 4.2%.

BMW, Siemens and Allianz have their headquarters in Munich
Nürnberg has much lower purchase prices than Munich and an above-average share of industrial employment
The Alps and lakes draw holidaymakers. Check the local rules on holiday letting before you buy a vacation rental

Transfer Tax Details

Bavaria levies a Grunderwerbsteuer of 3.5%, the lowest rate in Germany. Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein charge 6.5%. On a 500,000 euro property you pay 17,500 euros in transfer tax in Bavaria, compared with 32,500 euros in Brandenburg or Schleswig-Holstein. The 15,000 euro difference lowers your acquisition costs and the equity you need for the purchase.

Investment Cities

Besides Munich, several Bavarian cities have markets of their own, with different prices and tenants.

Munich: Germany's most expensive market; gross yields are among the lowest in Germany
Nürnberg: Bavaria's second-largest city and the largest in Franconia, with several universities and much lower purchase prices than Munich
Augsburg: Bavaria's third-largest city, with a university
Regensburg: The old town is a UNESCO World Heritage site; the city has a university

Frequently Asked Questions

Why does Bavaria have the lowest transfer tax in Germany?

Since the 2006 federalism reform, the states may set the rate themselves. Bavaria has not done so, so the 3.5% rate from § 11 of the Grunderwerbsteuergesetz still applies there. Every other state has raised its rate to between 5.0% and 6.5%.

Is Munich too expensive for property investment?

Munich has the highest purchase prices in Germany, so its gross rental yield is lower than in almost any other large city. You can see the current figures at the top of this page. If a higher yield matters to you, compare surrounding municipalities and other Bavarian cities.

What are the best areas for rental investment in Bavaria?

If yield matters to you, compare Nürnberg: purchase prices there are well below Munich and the gross yield is higher. In cities such as Augsburg, Würzburg, Erlangen or Regensburg, check the yield of each apartment with a realistic net rent and all costs.

Cities with the highest yield in Bavaria

Gross rental yield of cities with at least 30 listings for sale.

Rental yield ranking for Bavaria: cities compared

Major cities in Bavaria

Check an apartment in Bavaria

A city's median says little about a single apartment. Enter the address, price and rent to see cash flow, net yield and taxes.