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Selling Your Property: Understanding 'Spekulationssteuer' (Speculation Tax)
Planning to sell for a profit? Be careful. If you sell too early, the state takes a huge cut. We explain the 10-year rule and the exemption for self-use.
Table of Contents
In Germany, real estate is seen as a long-term investment, not a 'flip' opportunity. If you sell a property at a profit shortly after buying it, you are subject to 'Spekulationssteuer' (speculation tax). This is not a fixed rate but is added to your regular income, meaning you could be taxed at your highest marginal rate (up to 45%).
1. The 10-Year Rule
If the property has been rented out to third parties, you must hold it for at least 10 years from the date of the notary contract. If you sell it after 9 years and 11 months, the entire profit is taxable. If you sell it after 10 years and 1 day, the profit is 100% tax-free.
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2. The Self-Use Exemption
There is a major exception: If you lived in the property yourself for the year of the sale and the two preceding years, you can sell it tax-free at any time, even if you haven't owned it for 10 years. Documentation (Anmeldung) is key here.
