Last Updated on August 26, 2026
If you are thinking of selling, or have recently sold, a property in Germany, it’s important to understand the taxes that apply to the sale.
Whether you’re selling an apartment in Berlin or a Schloss in Bavaria, if you make a profit, Capital Gains Tax (CGT) will apply.
This guide explains everything you need to know about capital gains tax when selling a property in Germany.
How does Capital Gains Tax work?
Capital Gains Tax in Germany can be a point of confusion for many expats.
In Germany, there is no single Capital Gains Tax that applies to all assets. Instead, the way profits are taxed depends on what you sell. For example, shares and other financial investments are taxed differently from real estate, and certain property sales may not be taxed at all.
For the majority of investment income (stocks, bonds, interest, etc.), the tax is levied at a flat rate of 25% on the profit from the sale. In addition, a 5.5% solidarity surcharge is applied to the CGT amount, effectively bringing the rate to 26.375%.
If church tax applies, the total rate may reach approximately 28%, depending on your location.
However, the sale of German real estate incurs a different rate of CGT.
How are property sales taxed in Germany?
Any profit generated from the sale of property in Germany is subject to CGT. However, it is not as easy as applying the flat rate of 25% to your profit as you would for other investment assets.
For real estate, gains are taxed at your personal income tax rate, which varies for residents and non-residents.
- Residents are taxed at the progressive income tax rate between 0-45%.
- Non-residents are taxed at the progressive income tax rate between 14-45% (as non-residents do not benefit from the basic tax-free allowance).
For example, if your income is currently being taxed at a rate of 30% and you decide to sell your house, any profit on the sale will also be taxed at a rate of 30%.
How to reduce Capital Gains Tax
It is possible to reduce the amount of Capital Gains Tax you owe when selling a property in Germany. CGT does not apply to property sales if:
- the property is held for more than 10 years; or,
- the property was used as your primary residence for at least two calendar years plus the year of sale.
For example, if you move in on 31 December 2024, live there all of 2025, and then sell on 1 January 2026, you are exempt because you lived there in 2024, 2025, and 2026.
In addition to this, all German residents have a yearly tax-free allowance on capital gains before any tax is charged. This tax-free amount is known as the Sparerpauschbetragl (saver’s lump-sum allowance).
The tax-free allowance varies depending on your marital status:
- For single persons, the allowance amounts to €1,000.
- For married persons, the allowance amounts to €2,000.
However, this allowance does not apply to profits arising from the sale of property.
| Situation | German CGT treatment |
|---|---|
| Property sold within 10 years | Gain may be taxable |
| Property sold after more than 10 years | Generally exempt |
| Qualifying owner-occupied property | May be exempt even within 10 years |
| Rental/investment property | 10-year rule particularly important |
| Non-resident selling German property | German taxation can still apply |
Does Germany tax foreign gains?
Yes, Germany taxes its residents on their worldwide income, including foreign capital gains.
If a double-taxation treaty exists between Germany and the country where the gains are made, you may not be taxed in Germany as existing CGT paid will be taken into account when calculating any German tax due.
This means you are highly unlikely to pay tax twice on the same gain, although you may have to pay a top-up if the German tax rate is higher than that of the country where the gains are made.
For example, if as a German resident paying income tax at a rate of 42% you sell a property in Ireland and make a profit of €100,000, you will owe tax in both Ireland and Germany as the CGT rate in Ireland is only 33%.
First, you will need to pay the 33% tax in Ireland – €33,000.
Then, you will be required to pay the 9% difference in Germany – €9,000.
This brings your total CGT paid to €42,000.
Do foreign investors pay capital gains in Germany?
Yes, foreign investors in German assets still owe capital gains in Germany.
If a foreign investor sells German real estate for profit, the realized capital gains are subject to German limited income tax liability.
How to calculate capital gains tax on property sales?
Once you know the rate of capital gains you are paying, calculating what you owe is relatively straightforward.
If you have sold a property in Germany and want to calculate the CGT you owe, there are three key stages to work through:
- Establish how long you have held the assets. It’s important to first review if your property has become CGT exempt by double checking if you have held the property for over 10 years or used the property as your primary residence for at least two calendar years plus the year of the sale.
- Calculate your capital gain. To do this, simply work out the difference between the purchase and sale price of the asset. When doing this, make sure to include any costs incurred when purchasing the property and subtract any selling costs.
- Confirm and apply your CGT rate. Confirm the rate of income tax you are currently paying as this will also be the rate of CGT you will owe. To find out the sum of what you owe, multiply your taxable gain by this rate.
- Consider your annual exemption. Each year you can claim up to €1,000 tax-free as a single individual, or up to €2,000 as a married couple. This can provide some relief on CGT owed.
Who can help me file my German tax return?
If you are looking for property tax advisors, you are on the right page.
PTI Returns’ tax experts will help you file your German tax return online and assist you in calculating any capital gains owed arising from the sale of a property.
They will take care of all the paperwork, saving you time and stress, and will claim deductible property expenses, so you don’t pay more tax than you should.
Frequently Asked Questions about Capital Gain Tax
Is German property tax-free after 10 years?
Generally, capital gains tax on the sale of German property does not apply if you have held the property for more than 10 years. You may also qualify for an exemption if it was your primary residence for at least two calendar years plus the year of sale.
What is the German 10-year property rule?
The German 10-year property rule means that capital gains tax is generally not charged when you sell a property you have owned for more than 10 years. If you sell sooner, any taxable profit is typically taxed at your applicable German income tax rate, unless another exemption applies.
Is capital gains tax different for rental property?
Yes. Rental properties generally do not qualify for the primary-residence exemption, so a taxable gain on sale is usually taxed at your personal German income tax rate if you sell within 10 years. However, capital gains tax generally does not apply once the rental property has been held for more than 10 years.
Does Germany have a capital gains tax exemption?
Yes. Capital gains tax on the sale of German property may be exempt if you have owned it for more than 10 years, or if it has been your primary residence for at least two calendar years plus the year of sale. The standard annual capital-gains allowance does not apply to property-sale profits.
Does a double taxation agreement affect German property CGT?
A double taxation agreement may prevent the same property gain from being taxed twice. Where tax has already been paid in the country where the gain arose, Germany may credit this tax against the German liability; however, a top-up may still be due if the German rate is higher.