Mietkauf
Rent-to-Own. A rent-to-own structure: the occupier rents first and part of the rent is credited against a later purchase price. German practice splits it in two, a classic Mietkauf that obliges the occupier to buy and an Optionskauf that only grants the right to buy.
Both variants need a notary. § 311b Abs. 1 BGB requires notarial form for any contract obliging a party to transfer or acquire ownership of land, and a contract closed without that form becomes valid only once conveyance and land registry entry have taken place. The monthly payment splits in two: one part is rent the seller keeps, the other is credited against the purchase price. Only the credited part reduces what is still owed. Dr. Klein puts typical terms at 10 to 20 years, up to 30 for an Optionskauf, with rents running up to 50% above the local market rate.
Transfer tax does not wait for the handover. Under § 1 Abs. 1 Nr. 1 GrEStG the taxable event is the contract creating the claim to transfer, not the land registry entry, so a classic Mietkauf with a binding purchase obligation triggers the tax at notarisation, years before the occupier owns anything. For an Optionskauf, § 14 Nr. 1 GrEStG places the tax at the moment the condition occurs, meaning when the option is exercised. § 1 Abs. 2 GrEStG separately catches arrangements that let someone exploit a property for their own account without any claim to transfer at all.
Until conveyance and entry in the land register the occupier is not the owner. The property stays in the seller's estate and stays exposed to the seller's creditors and insolvency, which is precisely what an Auflassungsvormerkung exists to secure against. Where the occupier stops paying, these contracts commonly provide that the amounts already paid are forfeited.