Is it permissible to deal with an Islamic bank in Germany that purchases a house in partnership with the buyer (65% for the bank and 35% for the buyer), and then the bank sells its share to the buyer through Murabaha for a fixed amount over ten years, and in case of default, the interest is not raised but rather the case is referred to government authorities?

The aforementioned transaction is a "diminishing Musharakah" (partnership), which is Islamically permissible with certain conditions. The most important of these is that buying and selling should not be a stipulated condition within the partnership itself. Rather, it should be an independent promise from the bank to sell its share. The sale of the bank's share should be at the market price at the time of sale, not at the original price. Furthermore, it is not permissible to commit to buying the shares at their value at the inception of the project. It is permissible for the bank to sell its share to the customer through Murabaha (cost-plus financing) after acquiring ownership of the property, provided the contract is free from usurious conditions.