Buying an apartment for cash in Europe: features, risks, and benefits

European real estate has traditionally been considered a reliable way to preserve and grow capital. In recent years, interest has been growing in the option of purchasing an apartment in Europe with cash—without a mortgage or bank involvement. This strategy is particularly attractive to investors who value speed of transaction, minimal bureaucracy, and the ability to negotiate favorably with the seller.

However, simply having the funds doesn't always guarantee a smooth purchase. Even with sufficient cash, the buyer will need to consider local laws, anti-money laundering (AML/KYC) regulations, registration requirements, and, in some countries, special permits for real estate purchases, especially for foreigners. Cash can significantly simplify the transaction, but it doesn't eliminate the necessary bureaucratic processes.

It's important to remember that the EU will soon introduce new restrictions on cash payments: starting in the summer of 2027, the limit will be €10,000. However, "cash" in the context of real estate purchases doesn't refer to physical money, but rather, typically, a bank transfer from the buyer's account to the seller's. These nuances demonstrate that cash isn't so much cash in hand as a tool for a secure and transparent transaction, requiring proper goal setting and legal preparation.

Yes, buying an apartment with cash in Europe is possible, but it's not always as simple as it seems. The law doesn't prohibit such transactions, but the conditions can vary greatly depending on the country. In Austria, for example, cash simplifies the process from the standpoint of potential bank loan refusal, but it doesn't eliminate the need to go through legal and administrative procedures.

Even if you pay in cash, the money usually goes through an escrow account with a notary or bank. This step ensures the transaction is secure and transparent for both parties. In practice, this means there's no point in bringing a suitcase full of cash—all payments are processed via bank transfer.

Personally, I always recommend thoroughly vetting the notary you choose. A reliable notary not only ensures the secure transfer of funds but also helps structure the transaction correctly to minimize the risk of permission being denied or funds being frozen.

What to look for:

• Licenses and reputation. The notary must be officially registered and have positive client reviews. The bank or financial intermediary must be licensed to handle large cross-border transfers and have experience working with foreign investors.
• Transparency of procedures. All transactions must be documented: statements, agreements, and transfer confirmations. A notary verifies the transaction's compliance with the law, verifies the legal origin of funds, and ensures AML/KYC compliance.
• Experience working with foreign clients. This is especially important if the buyer is not an EU resident. The notary's and bank's experience in such transactions minimizes the risk of refusal or delays. In Austria, Germany, and Switzerland, notaries often assist with transactions for non-residents, verifying all documents and properly setting up an escrow account.

The most important aspect when buying an apartment with cash in Europe is confirming the legality of the source of funds. Banks and notaries typically require documentation proving the source of the funds: this could be the sale of a business, real estate, accumulated income, or funds transferred through official bank accounts.

For example, one of my clients wanted to buy an apartment in Vienna in cash. The sum was substantial, but thanks to a properly prepared set of documents detailing the source of the capital and a trusted notary, the transaction went smoothly.

My experience shows that those who present prepared documents and a transparent transfer scheme pass verification faster and often receive better terms when purchasing for cash, including the possibility of small discounts from the seller.

Purchasing an apartment with cash in Europe requires careful consideration, even if it's formally permitted. The main restrictions relate to:

• Anti-Money Laundering/Know Your Customer (AML/KYC) checks. Banks and notaries are required to verify that funds were obtained legally. Preparing a complete set of documents confirming the source of funds is key to a smooth transaction.
• Purchase permits for foreigners. This issue is particularly strictly regulated in Austria, Switzerland, and some German states. Even if you have cash, you still need to obtain permits or notify local authorities.
• Cash limits. In most countries, all large transactions are conducted via bank transfer; physical cash payments are not possible.
• Company registration requirements. In some countries, purchasing real estate through a company (for example, a GmbH in Austria) simplifies the process for foreigners, but adds obligations to comply with ownership and tax laws.

Even when buying with cash, the real estate acquisition process requires strict adherence to legal and financial procedures. Having cash expedites the transaction and gives you an advantage over buyers with a mortgage, but without a notary and proper paperwork, it's impossible to complete.

• Determine the type of property and region of purchase.
• Recommendation: research restrictions for foreigners, specifics of land laws, and the liquidity of the property.

• Checking property rights, debts, encumbrances and history of the property.
• It is important to make sure that the seller actually owns the property and that there are no hidden risks.

• The parties enter into a booking agreement or preliminary contract.
• Often accompanied by a deposit, which also goes through an escrow account.

• Even when paying in cash, the money is transferred to a temporary account with the notary or bank, ensuring the security of the transaction.
• Example: A client in Vienna paid €850,000 via escrow, and the money was only credited to the seller after all documents had been successfully verified.

• A notary or bank verifies the legality of the source of funds: business, sale of assets, income, deposits, or cryptocurrency through legal channels.
• Prepare documents proving the origin of your funds in advance – this will speed up the entire process and reduce the risk of blocking.

• After all checks and signing of the final documents, the money is debited from the temporary account and credited to the seller's account.
• All settlements are carried out without physical cash handling.

• The notary registers the transaction in the land register, and the buyer becomes the official owner.

Buying property in Europe with cash has several clear advantages that make it particularly attractive to investors and private buyers.

1. Quick deal

• Eliminating the need for credit approval or mortgage inspection allows you to complete your purchase much faster.
• Example: A deal in Vienna, where the buyer paid the full price of the apartment in cash, was closed in 4 weeks instead of the typical 8-12 weeks with a mortgage.

2. Possibility of a discount

• Sellers value buyers willing to pay upfront. This often results in a discount of 2-7% off the original price.
• Recommendation: during negotiations, use the fact of cash payment as an argument for reducing the price.

3. Minimizing dependence on banks

• There is no need to wait for the bank's decision on the loan or pay interest.
• For large transactions, this saves significant amounts of money and reduces bureaucracy.

4. Advantage over buyers with a mortgage

• In competitive environments, such as auctions or when purchasing popular properties, sellers often choose cash buyers because it ensures a fast and secure process.

5. Austria: Vienna and popular tourist destinations are especially advantageous

• In Austria, buying with cash gives an advantage in Vienna, Salzburg and popular tourist destinations where competition for properties is high.
• Example: A buyer obtained a property in the center of Vienna at a slight discount because he could close the deal in two weeks, while other participants with a mortgage were waiting for bank approval.

Many people think that buying with cash means they can simply bring cash in a suitcase and buy an apartment in Europe. In practice, this is impossible: large transactions always go through official channels.

When purchasing real estate, funds are transferred using a secure and transparent scheme:

• Bank transfer is the primary payment method; funds are transferred from the buyer's account to the notary's or seller's account.
• Escrow account with a notary – funds are blocked until all checks are completed and documents are signed.
• AML/KYC verification – confirmation of the legal origin of capital (sale of business, real estate, official income, deposits).

In Europe, large-value transactions are strictly regulated to prevent money laundering and ensure transparency of financial flows:

• The EU Anti-Money Laundering Directive (AMLD 6) obliges banks, notaries and other financial institutions to check the origin of large amounts of money and report suspicious transactions.
• Cash payment limits are in place in a number of EU countries: for example, France, Italy, and Spain limit payments over €10,000 (with gradual tightening by 2027).
• Monitoring financial flows protects both parties to a transaction – the buyer and the seller – from the risk of funds being blocked, fines, or fraud.

In Austria and most EU countries, such schemes are mandatory for all major real estate transactions.

When buying real estate with cash in Europe, people often think the main challenge is finding the necessary funds. In practice, the biggest challenge for foreigners is legal restrictions and obtaining purchase permits, especially in strictly regulated countries like Germany and Austria.

EU citizens – the process is simple

• Citizens of European Union countries face fewer bureaucratic obstacles.
• In most EU countries, they can buy property almost as freely as local residents.

Non-EU residents – land restrictions

For foreign buyers, the main difficulty is not money, but legal restrictions in certain regions.

• Austria: Non-EU residents face particular difficulties purchasing property in the states of Carinthia and Tyrol, where restrictions on foreigners purchasing property in Austria and approval from the local Erwerbskommission may be required. In Vienna, purchasing is possible, but also requires notification to local authorities and proof of the legal origin of the funds.
• Germany: Some states, such as Bavaria, impose restrictions on foreign buyers purchasing properties in tourist or historically significant areas.
• Switzerland: Foreigners are prohibited from purchasing property in resort and protected areas without government permission.
• Spain: Most regions have no strict restrictions, but some municipalities, particularly on the Costa Brava or Costa del Sol, may require permission from local authorities.
• France and Italy: Generally easier, but purchases in “highly sensitive” or historic areas may also require approval from local authorities.

Before purchasing, it's important to check the requirements for foreigners in a particular state or municipality. In some cases, transacting through a registered company can simplify the process and expedite approval.

Confirming the legality of your capital source is one of the key steps when purchasing real estate with cash in Europe. Without proper documentation, the transaction may be delayed or even blocked.

The main methods of confirming funds:

• Sale of a business or real estate. If the funds were received from the sale of an existing business or other real estate, you must provide transaction documents: a purchase agreement, bank statements, and proof of receipt of funds.
• Deposit programs. Funds in deposits or savings accounts are confirmed by bank statements. Ensure that the bank can issue official confirmation of the origin of the funds that complies with AML/KYC requirements.
• Official income. Income from the past several years (salary, dividends, royalties) can also serve as proof of legal capital. Tax returns, payroll statements, or income statements must be provided.
• Cryptocurrency → bank → escrow → transaction. If funds were received in cryptocurrency, they must be legalized through an official bank transfer to the buyer's account, and then through an escrow account held by a notary or bank. Direct crypto → real estate exchanges are prohibited and are not accepted by banks. Use legitimate exchange platforms and document all transactions to ensure they comply with AML/KYC requirements.

Buying property with cash in Europe seems straightforward, but there are specific risks for foreign buyers that are important to be aware of in advance.

Denial of purchase permission

• In some countries and regions (e.g. Austria: Carinthia, Tyrol; Switzerland: resort areas) foreigners may be denied permission to purchase real estate, even if the funds are completely legal.
• Check the requirements for your specific region and gather all documents confirming your source of capital in advance.

Long checks

• AML/KYC procedures can take several weeks or months.
• Example: A buyer from outside the EU waited almost 2 months for approval in Vienna, despite paying in cash, due to the need to verify all transactions and the origin of the funds.

Blocking funds in case of AML violation

• If a notary or bank has doubts about the legality of the funds, the money may be frozen in the account or escrow until an investigation is carried out.
• Use official bank transfers and pre-prepared documents.

Incorrect transaction structure

• Purchasing through an inappropriate legal form (such as an unregistered company) may result in denial of permission or additional tax liabilities.
• Consult with a notary and lawyer in advance, especially if the purchase will be made through a company or in highly regulated regions.

Use transparent fund transfer schemes through escrow and official banking channels. Document preparation and proper transaction structure reduce all of these risks and expedite property registration.

When buying a home with cash in Europe, it's important to consider all associated costs in advance to properly budget. Key expenses include:

• Notary – ensures the legality of the transaction, registration of property rights and control over the escrow account.
• Broker – services for finding a property, negotiations and transaction support.
• Purchase tax ( Grunderwerbsteuer / Transfer Tax / Imposta di registro) – varies by country and region, usually calculated as a percentage of the property’s value.
• Bank transfer - a fee for international transfers, especially for large amounts.
• Escrow is a fee charged by a notary or bank for maintaining a temporary account for the secure transfer of funds.

Purchasing an apartment in cash through a company is a popular strategy among foreign investors in Europe. This arrangement can simplify certain procedures and provide additional capital protection, but it requires careful adherence to laws and regulations.

Possible schemes:

• GmbH (Austria) – a local limited liability company. It allows foreigners to simplify the transaction process, especially in states with restrictions on non-residents.
• Foreign companies – registration through a company outside the country of purchase (e.g., Estonian OÜ, Cyprus Ltd, Malta Ltd). In some cases, this simplifies the transaction structure and tax planning.

Advantages:

• Simplification of procedures – especially in countries with strict requirements for foreigners (Austria, Switzerland, Germany).
• Capital protection – limited liability and the ability to segregate assets.
• Flexibility in property management – ​​leasing, transferring rights, or subsequent sale through a legal entity is easier to arrange than through an individual.

Be sure to follow the beneficial owner disclosure rules to avoid transaction blocking or penalties.

Using cryptocurrency to purchase real estate is becoming increasingly popular, but it's important to understand that directly exchanging tokens for real estate is not possible. Any cryptocurrency transactions require legalization through official financial channels.

Purchase scheme:

• Crypto → bank / non-bank. Cryptocurrency must first be transferred to an account that can be recognized as an official source of funds. This could be a bank account or a licensed exchange platform that provides documentary proof of the transfer.
• Bank / Non-Bank → Escrow. Funds are then transferred to the notary's or bank's escrow account, which ensures the transaction is secure and all legal procedures are followed.
• Escrow → transaction. After verifying the origin of funds and all documents, the money is transferred to the seller, and the title is registered in the land registry.

Important points:

Direct exchange of USDT or other cryptocurrency for real estate is prohibited