Selling a property at a profit? This gain can quickly cost you tens of thousands of euros in taxes if you're not aware of the correct deadlines and deductible costs. We show you how to accurately determine and optimize your tax burden using a precise speculative tax calculator.
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The topic briefly and concisely
For rented properties, the speculative tax is eliminated after a holding period of ten years; the sale is then completely tax-free.
If you use a property yourself in the year of sale and the two preceding years, you can sell it without capital gains tax, regardless of the 10-year period.
The taxable profit is calculated by deducting the acquisition, selling, and modernization costs from the selling price.
Did you know that the tax authorities can claim a significant portion of your profit from an unconsidered property sale? The so-called speculation tax is an income tax on private capital gains, which is often underestimated. Its amount depends on your personal tax rate and the capital gain, which can quickly reach 40% of the profit. This article serves as a practical guide for you: you will learn how the calculation works, which deadlines and exceptions are crucial, and how you can legally reduce your tax burden by deducting costs. This way, you ensure that more of your sale proceeds remain with you in the end.
Basics of Capital Gains Tax on Property
The speculation tax is not an independent type of tax but rather a colloquial term for the taxation of profits from private sales transactions according to § 23 of the Income Tax Act (EStG). The legislator's aim is to tax short-term, speculative real estate transactions to stabilize the property market. It becomes due whenever you sell a property at a profit within a specific period – the so-called speculation period. The profit is then added to your taxable income and taxed at your personal income tax rate. This affects not only houses and apartments but also undeveloped plots of land. Therefore, thoroughly understanding these periods is the first step towards optimizing taxes.
The 10-year period: The critical factor for landlords
For externally used, i.e., rented or leased properties, a ten-year speculation period applies. If you sell such a property only after the expiry of ten years, the entire profit is tax-free. This period begins with the date of the notarised certification of the purchase contract, not with the land register entry or the change of burdens. A sale that is notarised even one day before the end of this period can trigger a tax liability of several tens of thousands of euros. An example: A rented apartment was purchased on 15 May 2015. A tax-free sale is therefore only possible from 16 May 2025. A precise examination of the applicable deadlines is therefore essential. However, there are important exceptions that allow for an earlier tax-free sale.
Exceptions to the rule: How to keep the sale tax-free
The most important exception to the ten-year rule is owner-occupancy. If you sell a property that you have occupied exclusively yourself, the speculation tax does not apply. Another practical exception applies to properties that have only been occasionally self-used: Here, the sale is tax-free if the property was used for personal residential purposes in the year of sale and in the two preceding calendar years. A period of one year and two days might suffice here; for instance, from December 2023 to January 2025. The following scenarios also lead to tax exemption:
The sales profit is below the threshold of 1,000 euros per year (from 2024).
You incur a loss on the sale.
The property is gifted or inherited, as no sale takes place in these cases.
You sell an inherited property in which the deceased had already met the deadlines.
These exceptions offer significant savings potential that should be evaluated before every sale. How the profit is calculated in detail is the next crucial step.
Calculate profit: The calculator for your speculative tax
The basis for the capital gains tax is the gain from sale, not the selling price. Precise calculation is crucial to determine the correct tax liability. The formula is straightforward, but the details are important. An accurate valuation from Auctoa forms the foundation for an optimal selling price. The calculation follows these steps:
Selling Price: The price recorded in the notary contract for the property.
./. Acquisition Costs: These include the original purchase price, land transfer tax, notary and registry fees, as well as brokerage fees at the time of purchase.
./. Selling Costs: Costs directly associated with the sale, such as brokerage commission, advertising costs, appraisals, and notary fees for the sale.
./. Modernisation Costs: Expenditures for renovations in the last three years prior to the sale may be deductible.
+ Depreciation Allowance (AfA): If the property has been rented out and depreciated for tax purposes, these amounts must be added back to the gain.
The resulting amount is the taxable gain. For example: A sale for €400,000, acquisition costs of €300,000, and selling costs of €15,000 yield a taxable gain of €85,000. This will be taxed at your personal income tax rate. Identifying the exact costs you can claim is a crucial lever for reducing the tax.
Deduct costs and actively reduce tax burden
Every euro you claim as an expense reduces your taxable profit and thus directly your tax payment. Many owners miss out on potential savings here. Even €10,000 in deductible expenses can reduce your tax burden by up to €4,500, depending on your tax rate. The most important deductible items include notary fees for the sale, mortgage discharge fees, real estate agent commissions, and costs for valuation reports. Costs for the energy certificate are also deductible if the sale is taxable. To minimize your tax burden, you should carefully collect all relevant receipts. A detailed listing helps not only with the tax return but also in deciding whether a sale before the deadline is worthwhile. A conversation with our ImmoGPT can help provide an initial assessment of deductible expenses for your individual case. A special case with its own rules is the sale of an inherited property.
Inheritance Special Case: Does the 10-Year Rule Apply Here?
A common misconception is that the speculation period restarts with the commencement of an inheritance. This is incorrect. As an heir, you inherit the property along with its entire tax history. The determining factor is the original purchase date by the decedent. If the deceased purchased the property, for example, nine years ago, you, as the heir, only need to wait one more year before selling it tax-free. If the decedent used the property themselves in the year of sale and the two prior years, you can sell it immediately without tax. This regulation prevents a double burden from inheritance tax and speculation tax. Thus, a thorough review of the documents left by the decedent is of great importance for heirs to avoid costly tax errors.
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The speculation tax can consume a significant portion of your sales profit, but with proactive planning, it can often be legally avoided or reduced. The right timing, a thorough understanding of the exemptions, and comprehensive documentation of all deductible expenses are the key levers. An accurate calculator for the speculation tax on a property sale is more than just a tool – it's the foundation for an informed strategic decision. Use this knowledge to secure your sales proceeds. A data-driven assessment by Auctoa provides you with the necessary confidence for the first step.
Additional useful links
The Federal Ministry of Finance provides explanations on § 23 of the Income Tax Act (EStG) regarding other income, particularly private capital gains.
On Gesetze im Internet, you can find the full text of § 23 Income Tax Act (EStG) concerning other income.
The Federal Statistical Office (Destatis) offers comprehensive information on construction prices and the real estate price index.
Tables on house and land prices are also available at the Federal Statistical Office (Destatis).
An appendix to the Income Tax Act (EStG) can be found on the page of the Federal Ministry of Finance.
Haufe offers an article on the speculation period and the revised simplification rule for the allocation of the value increase.
A current press release from the Federal Statistical Office (Destatis) is available here.
FAQ
What is the tax rate for capital gains tax?
There is no fixed tax rate. The profit from the sale of the property is added to your other income and is subject to your personal income tax rate, which can be up to 45% (wealth tax).
Does a home office count as personal use?
Yes, a home office is generally considered as part of personal use and does not jeopardise tax exemption, provided it constitutes a subordinate part of the total living area.
What happens if I sell at a loss within the 10-year period?
A loss from a private disposal transaction can be claimed for tax purposes. It can be offset against gains from other private disposal transactions in the same year or carried forward to future years.
Does the deadline for a new build start with the purchase of the land or the completion of the construction?
The speculation period begins with the date of the notarial purchase agreement for the undeveloped plot, not just upon completion of the house.
Does the self-use exemption also apply to holiday apartments?
No, a holiday apartment that is not permanently used as a main residence and is rented out occasionally generally does not fall under the self-use exemption. The ten-year period applies here.
What if I only occupy part of a multi-family house myself?
In this case, only the part of the property you personally occupy (e.g., an apartment) is tax-free after the shorter period. The full speculation period of ten years still applies to the rented units. The profit from the sale must be apportioned accordingly.
