Exemptions from property income tax

Primary residence exemption

The sale of homes, commonhold properties and land are tax-exempt if they constitute the primary residence of the taxpayer. The primary residence (the focal point of life) is the home or commonhold property in which the seller has lived continuously for at least two years since it was acquired and up to the time of sale. The primary residence exemption also applies if the seller has lived in this house or this apartment as the "primary resident" continuously for at least five years within the last ten years prior to the sale (the "five out of ten rule").


In contrast to the producer exemption, the primary residence exemption also covers the land, for a surface area of up to 1,000 m2. The exemption for a five-year continuous primary residence also applies if the primary residence was rented out for the remaining period of time (up to five years).

As the "five out of ten rule" does not require that the property be the primary residence immediately prior to the sale, the exemption will continue to apply even if the taxpayer already gave up his/her primary residence prior to the sale (but no longer than five years before the sale; see also below). In principle, the seller him/herself must have been the owner of the property while it was being used as the primary residence. The primary residence exemption is thus generally not inheritable, meaning that a sale from an estate is liable for tax even if the deceased would have met the primary residence requirement. However, periods during which the seller resided in the property as a dependant but was not yet the owner count towards the "five out of ten rule", provided that he/she ultimately inherits the property or receives it as a gift. Therefore, if an inherited or gifted detached house or commonhold property is sold, what is decisive is whether the seller had lived there continuously for five years as his/her primary residence (even as a mere housemate of the person who later bequeathed or gifted the house or apartment). Furthermore, the seller must relinquish or (in the case of the five-year period) must have already relinquished the primary residence.


  • A person divides his/her home into two residential units, sells one and retains the other as his/her primary residence. The primary residence exemption does not apply.
  • A person's home has been his/her primary residence for more than five years, he/she sells that home and remains there as the primary tenant (for more than one year). The exemption is not granted.
  • A person's commonhold property has been his/her primary residence for more than five years. He/she owns a second commonhold property that he/she rents out. Once the rental arrangement has ended, he/she moves into the previously rented apartment as primary resident and sells his/her former primary residence. The exemption is granted.
  • A person inherits his/her parents' commonhold property in which he/she has not lived for more than five years and sells it.The sale is not exempt. 

Under the two-year rule, it is not detrimental to the question of use since acquisition if the owner-occupied home (commonhold property) is not occupied as a primary residence until a period of no more than one year from acquisition. The primary residence may be abandoned within a tolerance period of one year before or after the sale (however, use as a primary residence after the sale is irrelevant for meeting the minimum period).

Under the "5 out of 10 rule", the primary residence may be abandoned earlier, but no longer than five years before the sale. For the abandonment of the primary residence after the sale, a tolerance period of one year also applies here.

Producer exemption

Profit from the sale of a self-constructed building is also tax-exempt. In this case, however, the associated land is liable for tax (see in this regard the example under "Old buildings"), unless the primary residence exemption is also applicable (see note below). A self-constructed building is one where the taxpayer builds the building from scratch (that is to say "house construction" and not completion or renovation, even if comprehensive) and assumes the (financial) risk associated with construction. A building is also self-constructed if it was built by an appointed contractor but the owner had to assume the risk of any cost overruns. The seller him/herself must have constructed the building; self-constructed buildings built by the legal predecessor are thus not covered by the producer exemption.

An exception to the producer exemption applies if the building has served to generate income within the last ten years: if the building has been only partially used to generate income (partial rental of the house or commonhold property), only the non-rented part may be exempt from taxation, with the rented part not being eligible for the exemption.


If the primary residence exemption and the producer exemption both apply, the primary residence exemption takes priority. This is more favourable as it is only the building that is tax-exempt under the producer exemption, whereas the associated land is also exempt under the primary residence exemption, in principle.


Sales carried out in the course of or in order to prevent official intervention (expropriations) are tax-exempt.

Certain exchange transactions

Exchange transactions involving agricultural and forestry plots of land as part of amalgamation and land consolidation procedures and exchange transactions involving plots of land as part of land rationalisation procedures are tax-exempt.

In these cases, the information relating to the exchanged plots of land that is relevant for tax purposes must be carried forward.

Translated by the European Commission, altered by the Federal Ministry of Finance
Last update: 1 January 2023

Responsible for the content: Federal Ministry of Finance