When is a property sale tax-free?

German tax law draws a clear line between private property and business property, and the rules for selling are very different on each side.

For private investment property — typically residential property held by an individual outside any business structure — capital gains tax depends on the holding period. Selling within ten years of purchase usually triggers full income tax on the capital gain at your personal rate. Selling after ten years (the Spekulationsfrist) is normally tax-free, no matter how large the gain is.

There's also a useful exception for owner-occupied property: if you used the property as your own residence in the year of sale and the two preceding calendar years, the sale is tax-free even if you held it for less than ten years.

A few details that catch people out: the ten-year period runs from the notarised purchase date to the notarised sale date — not from when you moved in or out. Partial own use (renting out one room while living in the rest) doesn't always satisfy the owner-occupied rule, depending on exactly how the use was structured. And properties held inside a business structure (for example as part of a professional activity) follow different rules entirely — the tax-free 10-year window doesn't apply there.

Selling close to the 10-year line is genuinely one of those moments where a few months of patience can be worth a lot of money, and where a Steuerberater opinion before signing pays for itself many times over.