German property sales and the ten-year tax rule
When § 23 EStG matters for a private property sale: holding period, own residential use and records to prepare for your tax adviser.
Published by: HomesInGermanyUpdated:
Quick answer
A gain on a privately held property can be taxable if no more than ten years separate acquisition and sale. § 23 EStG includes exceptions for own residential use. The term ‘speculation tax’ does not mean a flat tax rate; treatment and calculation depend on the individual case.
Check the own-use exception carefully
The statutory exception covers exclusive own residential use between acquisition or completion and sale, or own residential use in the year of sale and the two preceding years. Mixed use, periods of letting and special circumstances need individual review before a sale.
Records for your tax adviser
Prepare the acquisition contract, purchase costs, periods of use, rental records, depreciation, building work and planned selling costs. Not every renovation is automatically deductible. Inheritance, gifts, business assets or living abroad introduce further questions. Have the potential net proceeds calculated before committing to a sale.
Sources and further reading
General information. Legal and tax outcomes depend on your circumstances; check your case with your notary or tax adviser.