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selling an apartment after 2 years
Are you considering selling your flat again after just two years? This step can have significant tax implications, but it also presents opportunities. We will show you how to correctly utilise the statutory deadlines and avoid pitfalls such as the prepayment penalty.
With access to Google, BORIS, and Deep Research.
A tax-free sale of a flat is possible after a short holding period if it has been used personally in the year of sale and the two preceding calendar years.
The capital gains tax is calculated based on the personal income tax rate (up to 45%) and is due on the profit from the sale price minus acquisition and advertising costs.
Apart from the tax, the prepayment penalty for the ongoing loan is a significant cost factor, which can amount to up to 10% of the remaining debt.
The sale of a property shortly after purchase is a scenario that concerns many owners. Often, the ten-year speculation period is perceived as an insurmountable obstacle that makes any quick sale unprofitable. However, that's only half the truth. Particularly for own-use residents, the legislator has defined clear exceptions that allow a tax-free sale after a short holding period. The key is knowledge of the exact regulations under § 23 EStG and strategic planning. This article provides you with the necessary key figures and facts to make the sale of your apartment legally secure and profitable after two years.
The German legislator aims to curb short-term, purely profit-driven real estate transactions with the speculation period. The basic rule is: If you sell a rented property within ten years of purchase, you must tax the profit at your personal income tax rate. This so-called speculation tax can be as much as 45% of the profit, depending on income.
The period starts precisely on the date of the notarised certification of the purchase contract and only ends after a full ten years. A sale the day before the 10th anniversary of the purchase would still trigger the tax liability. For example, with a profit of 90,000 euros and a personal tax rate of 40 percent, up to 36,000 euros in taxes could be incurred. An exact understanding of the deadlines is therefore essential for informed tax planning when selling a house. However, this rigid 10-year rule is not set in stone, as there is a crucial exception.
The most significant exception to the 10-year rule concerns owner-occupied properties. You can sell your flat tax-free within ten years if you have lived in it exclusively yourself. The condition is usage in the year of sale and in the two immediately preceding calendar years. The years do not need to be complete; a continuous period over three calendar years suffices.
A concrete example illustrates this:
Purchase and move-in: 1 December 2022
Usage throughout 2023
Sale and move-out: 31 January 2024
In this case, you have used the flat yourself in the calendar years 2022, 2023, and 2024. Although the actual occupancy duration is only 14 months, the sale is completely tax-free. This regulation makes a tax-free property sale possible even after a short period of time and offers significant financial advantages. The correct calculation of profit is the next logical step.
If the exemption for owner-occupiers does not apply, accurately determining the taxable profit is crucial. The formula is simple: Capital gain = sale price minus acquisition costs and advertising expenses. Acquisition costs include not only the pure purchase price but also incidental purchase costs such as property transfer tax (depending on the federal state, 3.5% to 6.5%), notary fees (approximately 1.5%), and land registry entry costs.
You can deduct any expenses as advertising costs directly related to the sale. These include:
Broker commissions (often between 3% and 7%)
Costs for sales advertisements
Expenses for obtaining an energy performance certificate
Travel costs to viewings
Costs for canceling the mortgage
Precise valuation is the basis for setting the sale price and accurately calculating the profit. With Auctoa's ImmoGPT, you can receive a preliminary, data-driven assessment in just a few minutes. This is especially important when it comes to inherited properties, as special rules apply here.
There is good news for heirs: The speculation period does not restart with the inheritance. Instead, as an heir, you take over the period of the deceased. If the deceased acquired the property more than ten years ago, you can sell it tax-free immediately.
The self-use rule is also inherited. If the deceased lived in the property during the year of sale and the two previous years, this applies to you as the heir as well. A sale is then also tax-free. This continuity protects heirs from an unexpected tax burden, often amounting to tens of thousands of euros. Therefore, a thorough review of the documents left by the deceased is crucial. You can find an overview of the deadlines related to inheritance in our guide on selling an inherited house. In addition to tax, there are other costs that are often overlooked.
A quick sale within the fixed interest period of your loan almost always leads to a demand from the bank: early repayment charges. This is how the bank compensates for the interest loss caused by the early loan repayment. This charge can quickly amount to 5% to 10% of the outstanding balance, thereby reaching a sum of several thousand euros.
However, there are a few exceptions. If your loan has already been running for more than 10 years, you have a special termination right with a notice period of 6 months, without any compensation being due. In some cases, the buyer can also take over the existing loan, although this requires the bank's approval. To minimise such risks when selling a house, early communication with your bank is essential. Good preparation is the key to success.
A successful sale after just two years requires more than just meeting deadlines. A professional property valuation for selling a house is essential to achieve a market-aligned price of on average over 95% of the asking value. Data shows that properties with a professional valuation are often sold 10-15% faster.
Additionally, ensure all documents are complete. A comprehensive record of acquisition and promotion costs can reduce your tax burden by thousands of euros. Use digital tools like the Auctoa ImmoGPT to quickly get answers to specific questions and optimise your sales strategy with data. A complete documentation is the final step before a successful conclusion.
Selling an apartment after 2 years is a realistic option that, if handled correctly, can bring significant financial benefits. The owner-occupancy exemption is the most important lever to legally avoid speculation tax. A thorough calculation of all costs, including potential early repayment penalties, protects against unpleasant surprises. A data-driven valuation ensures maximum yield. Make your sales decision not based on gut feeling, but on hard facts.
Wikipedia provides a comprehensive overview of private sales transactions that are relevant in the context of property sales.
Gesetze im Internet contains the full legal text of the Real Estate Transfer Tax Act (GrEStG).
Statistisches Bundesamt (Destatis) offers official statistics and data on construction prices and the real estate price index in Germany.
Deutsche Bundesbank provides detailed indicators and analysis of the German residential property market.
Bundesfinanzministerium provides information on legislative initiatives and amendments, such as those to the Real Estate Transfer Tax Act.
Deutscher Bundestag contains official documents and printed materials of the parliament that provide relevant information on legislative processes.
Deutsches Institut für Wirtschaftsforschung (DIW) offers scientific analyses and proposals for the reform of property taxation.
Verband deutscher Pfandbriefbanken (vdp) provides comprehensive information on the financing of residential properties, particularly through covered bonds.
Do I have to pay tax on the sale of a property where my child lived?
No, generally not. If your child, who is entitled to child benefit, lived in the property free of charge and the period of personal use (in the year of sale and the two preceding years) is met, it is treated as your own use. The sale is then tax-free.
What exactly is considered 'personal use'?
'Personal use' means that you live in the property yourself. Use as a holiday home or second residence can also suffice, as long as the property was available to you and not intended for rental. Registering it as your main residence is the most secure proof.
Can I deduct the early repayment penalty for tax purposes?
Yes, if you have to pay speculative tax, you can deduct the early repayment penalty as advertising costs from the capital gain. This reduces the tax payable. A deduction is not possible if the sale is tax-free.
What is the difference between a calendar year and a full year for the personal use period?
The legislator does not require a full 365 days per year. Use in three different calendar years is sufficient. Use from December of one year to January of the year after next (e.g., 12/2022 to 01/2024) covers three calendar years and meets the requirement.
Is speculative tax due if I make a loss on the sale?
No, speculative tax only applies to profits. If you sell your property at a loss, no tax is due. You can even offset this loss against any gains from other private sales transactions in the same year.
What role does the notary play in the speculative period?
The notary is crucial as the dates of the notarisation of both the purchase and sale contracts set the exact reference dates for calculating the 10-year period. The land register entry or transfer is irrelevant in this regard.
