Have you inherited a property and are wondering if selling it will lead to high taxes? The speculation period is one of the biggest financial hurdles, but it can often be legally avoided. This guide shows you how to calculate the periods correctly and use the exemptions to your advantage.
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The topic briefly and concisely
The 10-year speculation period begins with the purchase by the decedent, not with the inheritance event, which often allows for a tax-free sale.
The tax obligation is waived if the property is used personally in the year of sale and the two preceding calendar years – this also applies to usage by the deceased.
The capital gain is taxed at the personal income tax rate; deductible expenses such as broker fees or renovations can significantly reduce the tax burden.
The sale of an inherited house is an emotional and complex task for many heirs. In the midst of this phase, a crucial financial question arises: Is there a speculative tax when selling? The answer depends on the so-called speculation period when selling an inherited house, a 10-year rule that often causes confusion. The good news is that the key date of inheritance is not decisive. Rather, the period of ownership by the decedent is taken into account, which results in a tax-free sale in over 70% of cases. This article explains the exact rules, the key exceptions, and how a precise valuation can help you avoid costly mistakes and minimise your tax burden.
In Brief: Avoiding Tax Traps
Decisive date of the testator: The 10-year speculation period starts with the purchase date by the deceased, not the date of inheritance. If this period has expired, the sale is tax-free for you.
Private use as an exception: If the testator or you as the heir lived in the property during the year of sale and the two preceding calendar years, the speculation tax is waived, even within the 10-year period.
Profit under €600 tax-free: If the capital gain (sales price minus acquisition and sales costs) is below the exemption threshold of 600 euros per year, no tax is due.
Inheritance tax is separate: Regardless of the speculation tax, inheritance tax may apply. Personal exemptions apply here, ranging from €20,000 to €500,000 depending on the degree of kinship.
Basics: Understanding the speculation period for inherited properties
If you sell a private property shortly after purchasing it for a profit, the state wants a share of the proceeds. This is governed by the speculation tax, which is enshrined in § 23 of the Income Tax Act (EStG). The legislator aims to curb quick, purely profit-oriented real estate transactions. The crucial metric here is the holding period of 10 years. When you inherit, you legally succeed the deceased as the heir. This means for the speculation period on the sale of inherited property: you take over the period that is already running. So if the deceased purchased the house 11 years ago, you can sell it immediately tax-free. The period does not start anew at the point of inheritance, which is a significant advantage for heirs. Therefore, a thorough examination of the original purchase contracts is the first step. Inform yourself about the most important steps in selling real estate to get everything right from the start. This continuity of the period is key to tax optimisation.
The Owner-Occupancy Exception: The Fastest Way to a Tax-Free Sale
But what if the 10-year period has not yet expired? Here, the law offers a valuable exception: owner-occupation. If you or the previous owner lived in the property exclusively, the capital gains tax does not apply. Two conditions must be met for this:
The property was used continuously for your own residential purposes in the year of sale.
The property was also continuously occupied by yourself in the two preceding calendar years.
This provision is very flexible. Use over just one full calendar year plus an additional day in the preceding and following year is sufficient. An example: The deceased lived in the house until their death in January 2024. You move in immediately and sell in December 2025. Since the property was used by the deceased in 2023 and by you in 2024 and 2025, the sale is tax-free. This rule also applies if you have allowed a child of yours to use the house rent-free. Correct handling of this exception can save you up to 45% tax on the profit. However, you should still carefully consider the advantages and disadvantages of a sale.
Deadline calculation and tax amount: How the tax office calculates
Accurate calculation is crucial to avoid any unpleasant surprises. The notarially certified contract dates are always decisive for the start and end of the 10-year period. The day the purchase contract was concluded by the deceased is the starting point. The day the sales contract is concluded by you as the heir is the endpoint. If the sale occurs within this period, the profit will be taxed. The taxable profit is calculated as follows:
Sale price - (Initial purchase costs + Modernisation costs + Incidental sales costs) = Taxable profit
The deductible costs include not only the original purchase price but also the notary and land registry fees from that time, estate agent fees for the current sale, as well as value-enhancing renovations. The resulting profit is not taxed at a fixed rate but at your personal income tax rate. This can be up to 45%, depending on your income. A precise valuation is essential here. Use our inheritance tax calculator to get an initial assessment. This will provide you with a solid basis for your decision to sell.
Special Case of Inheritance Community: Decide Together, Share Taxes
If multiple people inherit together, an inheritance community is automatically formed. This community can decide unanimously on the fate of the property. This often leads to complex situations, especially when considering the speculation period for the sale of an inherited house. If the community decides to sell to a third party, the aforementioned rules apply to the entire property. The profit is divided among the co-heirs according to their inheritance quotas and taxed individually. It gets more complicated if one heir pays out the others to take sole ownership of the property. The purchase of inheritance shares by a co-heir is considered a business acquisition. For the acquired share, a new 10-year speculation period begins. If this heir then sells the house, for example after 3 years, the profit from his original share is tax-free (provided the old period has expired), but the profit from the purchased shares is fully taxable. A clear strategy is essential here. Determine early what needs to be considered with an inherited property.
Strategic Planning: How to Actively Reduce Your Tax Burden
You are not helplessly exposed to speculation tax. With the right strategy, you can often reduce the tax burden to zero. The most effective method is to wait until the 10-year period, which began with the purchase by the deceased, has expired. If this is not an option, consider the exception of personal use. Sometimes it can be worth moving in yourself for a little more than two calendar years to save tens of thousands of euros in taxes. Another option is profit reduction. Collect all receipts for costs that have increased the property value or are related to the sale. These include:
Costs for appraisals and energy certificates
Broker commissions and notary fees
Advertising and marketing costs
Subsequent acquisition costs (e.g., extensions, roof conversion)
Every euro in deductible costs directly reduces your taxable profit. Accurate documentation is worth real money here. If you are uncertain, a neutral evaluation by Auctoa or a conversation with our ImmoGPT chat can initially clarify which costs are chargeable. This ensures you do not overlook any opportunities for tax savings.
spekulationsfrist-bei-verkauf-von-geerbtem-haus
The speculation period for selling an inherited house is one of the most important financial hurdles that heirs need to be aware of. However, in most cases, a tax-free sale is possible, as the holding period of the decedent is counted and the 10-year period has often already elapsed. If this is not the case, the exemption for personal use is your strongest leverage to avoid the tax obligation. A careful examination of the periods and an accurate calculation of the profit after deducting all costs are essential. Auctoa's substantiated, data-driven real estate valuation gives you the necessary security for your decision. Do not act hastily, but use your knowledge for an optimal financial outcome.
Additional useful links
Gesetze im Internet provides the full legal text of § 23 of the Income Tax Act (EStG), which governs private sales profits.
Bundesfinanzministerium offers comprehensive information on inheritance and gift tax in Germany.
Finanzverwaltung NRW explains the reporting obligations for inheritances and gifts specifically for North Rhine-Westphalia.
Statistisches Bundesamt (Destatis) provides current data and information on construction prices and the property price index.
Statistisches Bundesamt (Destatis) offers detailed tables on house prices and land prices in Germany.
Statistisches Bundesamt (Destatis) publishes press releases containing relevant statistics and analyses.
Bundesfinanzministerium (EStH) contains the Income Tax Manual (EStH) with detailed explanations on § 23 EStG and private sales profits.
FAQ
Do I also need to consider the speculation period when selling at a loss?
Yes, the deadline always applies. However, a loss from a sale within the speculation period can be claimed for tax purposes. You can offset it against gains from other private disposal transactions in the same year or carry it forward to other years.
What happens if the inherited house was only partially used for personal purposes (e.g., with a home office)?
If a part of the property, such as a home office, is deducted for tax purposes as a business expense, this part is not considered to be used for residential purposes. In the event of a sale within the 10-year period, the profit attributable to this part would be partially taxable.
Does the 10-year period also apply to an inherited property?
Yes, the 10-year speculation period applies to undeveloped plots as well as houses and flats. Since a plot cannot be used for personal purposes, the period cannot be shortened here.
What is the three-object limit in the context of inheritances?
If you sell more than three properties within five years, the tax office considers it a commercial property trade. In this case, not only speculative tax but also trade tax is due. Inherited properties are included in this.
Does the period start anew if I carry out renovations as an heir?
No, modernisation or renovation work does not trigger a new speculation period. However, you can deduct the costs from the sales profit to reduce your tax burden, provided they are considered acquisition-related production costs.
How can Auctoa assist in valuation and tax minimisation?
Auctoa provides a fast, AI-powered property appraisal that delivers a neutral market value. This value serves as the basis for calculating inheritance tax and helps you realistically assess potential sales profits. Additionally, our ImmoGPT chat can answer initial questions specific to your situation.
