General information on property income tax

Since 1 April 2012, all profits obtained from the sale of property are, in principle, subject to income tax liability. The former speculation period lasting, in principle, ten years (reference was often incorrectly made in this context to a speculation tax in the sense of its own tax) was abolished.

The following are classified as property:

  • land,
  • buildings (including commonhold properties),
  • rights equivalent to property (building rights).

The former 10-year speculation period still has significance, however, as "old properties"i.e. most properties acquired before 31 March 2002, are normally only liable for a moderate income tax of 4.2 percent of the proceeds of the sale.

The property income tax only covers acquisition or sales transactions against payment. The transfer of a property without payment is, in principle, not relevant for tax purposes as these transactions do not involve any proceeds from the sale in the form of a consideration and thus no capital gains. In principle, therefore, gifts and inheritances are not subject to property income tax.

In particular, the primary residence of the seller and self-built buildings are exempt from taxation.

Legal bases

Sections 30 to 30c Einkommensteuergesetz (EStG)

Translated by the European Commission
Last update: 1 January 2023

Responsible for the content: Federal Ministry of Finance