Inheritance Manager
Real Estate Legal Information
Sale of an inherited property within 10 years
Have you inherited a property and are considering a quick sale? Many heirs fear high taxes when selling an inherited property within 10 years, but that doesn't have to be the case. Understand the key deadlines and exceptions to save thousands of euros in taxes.
With access to Google, BORIS, and Deep Research.
The 10-year speculation period begins with the purchase date by the testator, not with the date of inheritance.
Personal use by the testator or heir in the year of sale and the two preceding years eliminates the speculation tax.
The speculative gain is taxed at the personal income tax rate (up to 45%), not at a flat rate.
Selling an inherited property is a complex task often accompanied by emotional and financial challenges. Particularly, selling an inherited property within 10 years of the original acquisition by the deceased raises questions about capital gains tax. A lack of knowledge about the applicable deadlines and exceptions can lead to a significant tax burden of up to 45% on the capital gain. This article provides you with a clear, data-driven guide on how to correctly calculate the holding period, assess the benefits of personal use, and strategically plan the sale. This way, you can make informed decisions, minimise your tax liability, and secure the maximum return from your inheritance.
If you have inherited a property, the so-called speculation period according to § 23 EStG is the first important figure you need to check. This period is generally ten years. However, the crucial point is: the period does not begin with the inheritance event but with the date on which the deceased originally acquired the property. This continuity of the period is the greatest lever to avoid the speculation tax.
An example clarifies this: If the deceased acquired the property in 2013 and you inherit it in 2024, the ten-year period has already expired. The sale is therefore completely tax-free for you, which can increase the profit by up to 45%. Conversely, if the deceased purchased the property, for instance, five years ago, it means you "inherit" the remaining five years of the period. A closer look at the speculation period is therefore essential before planning further steps.
Even if the ten-year period has not yet expired, the sale may remain tax-free. The law provides an important exception for owner-occupied properties. There are two primary scenarios that allow for tax exemption:
Use by the deceased: If the deceased exclusively occupied the property in the year of inheritance and the two preceding calendar years, the speculative tax is waived for you as the heir.
Use by the heir: Alternatively, as an heir, you can avoid the tax obligation by using the property yourself in the year of sale and the two years prior.
A brief example to illustrate heir usage: Moving in by December 2023, continuous use in the year 2024, and a sale in January 2025 suffices to meet the requirement. Although you effectively only lived there for 14 months, this covers three calendar years. This regulation offers significant flexibility for heirs who need to sell in the short term. A tax-free house sale is therefore often possible within the 10-year period.
If the sale falls within the speculation period and no exception applies, the profit must be taxed. The basis for calculation is not the selling price, but the capital gain. The formula for this is simple, but requires precise figures:
Selling price: The price certified by a notary.
Less acquisition costs: This is the original purchase price paid by the testator, plus subsequent production costs.
Less selling and incidental costs: These include broker fees (often 3-7% of the selling price), notary fees (about 1.5-2%), and costs for modernisations in the last three years before the sale.
The resulting gain is taxed at your personal income tax rate, not at a flat rate. If your top tax rate is 42%, the speculative gain will be taxed accordingly. An accurate valuation is crucial to calculate the profit correctly. With our inheritance tax calculator, you can play through initial scenarios.
A common misconception is the conflation of inheritance tax and speculation tax. These are two completely independent types of tax. Inheritance tax is applied to the value of the estate you receive and is reduced by personal allowances. For children, this allowance is 400,000 euros, and for spouses, it's 500,000 euros, for example. If the value of the property is below this, you do not pay inheritance tax.
Speculation tax, on the other hand, refers exclusively to the profit from a resale within the time limit. Even if no inheritance tax is due, the full amount of speculation tax can be payable. A precise, data-driven evaluation is fundamental for both types of tax. You need a reliable market value for the tax office. At Auctoa, you can receive such an AI-supported analysis or directly clarify your questions with our ImmoGPT.
The sale of an inherited property within 10 years requires careful analysis of a few but crucial factors. First, check the original purchase date to determine the remaining speculation period. Secondly, analyze the usage history to benefit from the owner-occupier exemption, which can enable a tax saving of over 40%. Thirdly, accurately calculate all costs to avoid overestimating the taxable profit.
An informed decision is always based on hard facts, not on a gut feeling. The complexity of tax regulations makes a professional and impartial assessment essential. Such data-driven analysis protects you from unexpected tax demands and ensures you realize the true value of your inheritance. Contact us now without obligation to assess your situation. An accurate valuation is the first step to a successful sale.
Sparkasse explains the speculation tax when selling real estate.
Rose & Partner provides detailed information on the speculation tax for selling real estate and houses.
Handelsblatt informs you about what you should know about the speculation tax before selling a property.
steuern.de provides information on the speculation tax for real estate.
Gesetze im Internet offers the official legal text for the Inheritance and Gift Tax Act.
Bundesfinanzministerium supplies official information on inheritance and gift tax.
Stiftung Warentest explains how tax offices determine the market value of properties.
steuertipps.de provides information about changes in property valuation for inheritance tax from 2023.
Destatis offers information and data on the construction price index and property price index.
Welche Kosten kann ich vom Spekulationsgewinn abziehen?
Sie können die ursprünglichen Anschaffungskosten des Erblassers, die Notar- und Maklerkosten für den aktuellen Verkauf sowie wertsteigernde Modernisierungskosten der letzten drei Jahre vom Verkaufspreis abziehen, um den steuerpflichtigen Gewinn zu mindern.
What happens if I inherit only a share of a property (joint inheritance)?
In a joint inheritance, the same tax rules apply, but all decisions, including the sale, must be made collectively. The speculative profit is distributed proportionally among the co-heirs and taxed individually.
Does the owner-occupation exemption also apply to a second home or holiday home?
No, the tax exemption for owner-occupation only applies to properties used as the main residence and centre of life. Occasional use of a holiday home is generally not sufficient.
What is the three-property limit?
If you sell more than three properties within five years as a private individual, the tax office may consider this as commercial property trading. In that case, both income tax and business tax would be incurred.
Is capital gains tax also payable if I sell the inherited house at a loss?
No, capital gains tax is only levied on a selling profit. If the selling price, after deducting all costs, is below the original purchase price, there is no profit and therefore no tax liability.
How do I demonstrate owner-occupation to the tax office?
The best proof of owner-occupation is a certificate of residence from the residents' registration office. Additionally, utility bills or correspondence addressed to this location can serve as evidence.
