Selling a flat: speculation period, owner occupation and commercial property dealing
Gains from the sale of private real estate in Germany are only taxable within certain periods. This also applies to owners living abroad. Anyone who buys and sells frequently, on the other hand, may be classed as engaging in commercial property dealing (gewerblicher Grundstückshandel).
The ten-year period
Under § 23 (1) sentence 1 no. 1 EStG, the gain from the sale of a plot of land or a freehold flat held as private assets is taxable if no more than ten years elapse between acquisition and sale. The dates of the notarised purchase contracts are generally decisive, not the land register entry.
After ten years, the gain for private individuals is generally tax-free – regardless of whether the flat was let.
Exception for owner occupation
Within the period, the sale remains tax-free if the flat was used exclusively for the owner's own residential purposes either throughout the entire period between acquisition and sale, or in the year of sale and the two preceding calendar years. A holiday flat that was let from time to time generally does not meet this requirement.
Whether a second home that is only occasionally used by the owner counts as “own residential purposes” is a matter for the individual case – clarify this with a tax adviser before selling.
How the gain is calculated
The gain is the sale price less the acquisition costs and the selling costs (e.g. the seller's estate agent commission). The acquisition costs are reduced by the depreciation claimed (§ 23 (3) sentence 4 EStG). Anyone who has claimed depreciation for ten years and sells before the period expires therefore effectively pays tax on these amounts after all.
Gains from private disposals remain tax-free if the total gain in the calendar year is less than 1,000 € (exemption limit (Freigrenze), § 23 (3) sentence 5 EStG). If this limit is reached, the entire gain is taxable.
Owners resident abroad
Taxpayers with limited tax liability are also taxed in Germany on private capital gains from German real estate (§ 49 (1) no. 8 EStG). Double taxation agreements generally allocate the right to tax gains from the sale of real estate to the country in which the property is located. Whether and how your country of residence additionally taxes the gain depends on the agreement and on the law there.
Commercial property dealing
According to the tax authorities' view (BMF letter of 26.03.2004), anyone who sells more than three properties within around five years of acquisition or construction is generally regarded as a commercial property dealer. Gains are then subject to income tax and, where applicable, trade tax regardless of the ten-year period.
The three-property limit (Drei-Objekt-Grenze) is an indicator, not a rigid rule: the five-year period is not absolute, and properties sold only after five to ten years may also be included. Owner-occupied flats generally do not count. Anyone holding several flats should plan sales for tax purposes in advance.
Selling a let flat
An existing tenancy agreement does not end on sale: under § 566 BGB, the buyer assumes the landlord's rights and obligations (“sale does not break a lease” – „Kauf bricht nicht Miete“). Prospective buyers therefore expect the tenancy agreement, evidence of rent increases and details of the deposit.
If the flat was only converted into a freehold flat after being made available to the tenant, the tenant has a right of first refusal (Vorkaufsrecht) on the first sale to a third party (§ 577 BGB). The notary takes this into account in the contract; the tenant can declare within two months of being notified of the purchase contract whether they will buy on the same terms.
As a seller, too, you must present the energy performance certificate (Energieausweis) to prospective buyers at the latest at the viewing and hand it over after the contract is concluded.
Sources
- https://www.gesetze-im-internet.de/estg/__23.html
- https://www.gesetze-im-internet.de/estg/__49.html
- https://www.cpm-steuerberater.de/news/entry/2026/01/16/9545-grundstueckshandel-drei-objekt-grenze-steuerfallen-vermeiden
- https://rechtsanwalt-griechenland.de/wp-content/uploads/2026/07/Doppelbesteuerungsabkommen_Deutschland_Griechenland.pdf
- https://www.agenziaentrate.gov.it/portale/schede/pagamenti/imposta-sul-valore-degli-immobili-estero-ivie/base-imponibile-e-aliquota-scheda-ivie
- https://sede.agenciatributaria.gob.es/Sede/todas-gestiones/impuestos-tasas/declaraciones-informativas/modelo-720-decla_____sobre-bienes-derechos-extranjero_/preguntas-frecuentes.html
- https://taxdown.es/inversion-acciones-bolsa/modelo-720
- https://www.gesetze-im-internet.de/bgb/__566.html
- https://www.gesetze-im-internet.de/bgb/__577.html
- https://www.buzer.de/80_GModG.htm
Frequently asked questions
Does the ten-year period also apply to foreigners?
Yes. Via § 49 (1) no. 8 EStG, the rule of § 23 EStG also applies to owners without a residence in Germany.
When does the period start?
As a rule, from the date of the notarised purchase contract on acquisition to the date of the notarised purchase contract on sale.
Is tax payable on the sale of an inherited flat?
In the case of inheritance, the heir takes over the deceased's acquisition date. Whether the period has expired must therefore be checked against the deceased's purchase date.
As a seller, do I have to ask the tenant first?
No. The tenant does not have to consent; the tenancy agreement passes to the buyer. The tenant only has a right of first refusal in the cases set out in § 577 BGB.
General information, as at October 2026. It does not replace advice from a tax adviser, solicitor or notary.
