Germany has no separate capital gains tax on homes: a sale inside ten years is taxed as income, and after that it is usually tax-free. Here is how the clock, the exemption and the €1,000 threshold work.
Germany does not have a capital gains tax on property as a separate tax. Instead, a profit from selling a privately held property is treated as a private disposal gain under §23 of the Income Tax Act (EStG) and is added to your income, but only if you sell within a defined period. Understanding that period is the whole game.
The ten-year holding period
If the time between buying and selling is ten years or less, the gain is generally taxable. After ten years it is generally exempt. The relevant dates are normally the signing of the notarial purchase contract and the notarial sale contract; the land registry entry and the date money moves do not decide it. For inherited property the previous owner's period is, in effect, carried forward.
The self-use exemption
A sale inside ten years can still be tax-free if you lived in the property yourself. The exemption applies if the property was used as your own home continuously from acquisition to sale, or in the year of sale and the two calendar years before it. Renting it out or using it commercially during that window breaks the exemption, so a home you rented for part of the period needs a careful look.
How the gain is calculated
The gain is the sale price minus the original purchase price, the purchase costs, the selling costs and any other allowable expenses, adjusted for depreciation you may already have deducted against rental income. There is no flat rate: the gain is taxed at your personal income tax rate, and the solidarity surcharge may apply.
The €1,000 threshold
Since 2024 a gain from private disposals is tax-free if it stays under €1,000 for the year. This is a Freigrenze, not an allowance: once the gain reaches €1,000, the whole amount is taxable, not just the part above it. For a property sale this rarely matters, but it explains why small gains are sometimes left out.
If you live outside Germany
A non-resident is taxed in Germany on German-source income, and the sale of German real estate within the ten-year period falls into that category under the limited tax liability rules. Reports indicate that non-residents are taxed at progressive rates without the basic allowance a resident receives, but the exact outcome depends on your situation. Double tax treaties can change who taxes what and how your home country gives credit, and we could not confirm treaty-specific details for every country, so do not rely on a general summary: ask a tax adviser who knows both systems before you sign.
Sale-day checklist
- Check the purchase date in your notarial contract and count ten years from it before you list the property.
- Write down every period you rented it out, even briefly, because it affects the self-use exemption.
- Gather the purchase contract, notary and land transfer tax receipts, renovation invoices and any depreciation you have claimed.
- Report the sale in your income tax return for the year of the contract, and confirm the deadline with your adviser.
- If you are not a German tax resident, check how your home country will treat the same sale.
FAQ
Does Germany tax the sale of a home after ten years? Generally no, the gain is exempt once ten years have passed between the notarial purchase and sale contracts. What if I lived there? A sale inside ten years can be exempt if the property was your own home from purchase to sale, or in the year of sale and the two years before. Is there a flat rate? No, the gain is taxed at your personal income tax rate, and the solidarity surcharge may apply. What does the €1,000 limit do? It is a cliff, so a gain of €1,000 or more is taxable in full. Do foreigners pay? Non-residents are generally taxable in Germany on a sale of German property inside the ten years, and treaties may affect the result.
How we help
We help you understand the timing before you commit to a sale and connect you with German tax advisers who handle cross-border cases. This article is general information, not tax or legal advice, and the rules change, so confirm the details with a qualified adviser and the tax office before you act.