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Spekulationssteuer (§23 EStG) for foreign owners: the 10‑year rule, owner‑occupation and inheritance exceptions, and calculating gains and FX (September 29, 2026)
Clear guide for non‑resident and foreign owners on §23 EStG (Spekulationssteuer): when a private sale of German real estate is taxable, the 10‑year limit and its extension, the owner‑occupation and inheritance exceptions, and step‑by‑step rules to calculate gains and currency effects before you sell (as of 29 September 2026).
What §23 EStG (the "Spekulationssteuer") covers
Section 23 of the German Income Tax Act (Einkommensteuergesetz, EStG) treats certain private disposals of assets — including buildings, independent flats and land — as taxable "private sale" gains when the statutory holding period is not met. The statutory formula is straightforward in principle: the gain equals the sale receipts minus acquisition costs and direct, sale‑related expenses. For transactions not conducted in euro, the law requires conversion to euro at the relevant time points (acquisition date and sale date). (See EStG §23 for the exact wording.)
The 10‑year rule (and when it becomes 10 years)
The basic private‑sale rule is a short holding period that makes a gain taxable if you sell within the statutory period after acquisition. For buildings, flats and land the period is normally ten years when the asset has been used to produce income in at least one calendar year (for example, any year in which you received rental income). That ten‑year rule is part of the current statutory text of §23 EStG and the official income tax handbook (EStH Annex 26) explains its application to built property and to property that was later rented. If you acquired and sold within ten years and the property was ever used as a source of income, the sale will generally be a taxable private sale under §23 EStG.
Owner‑occupation exception (the "two‑year" path)
There is a well‑known exception for residential owner‑occupation. A house, flat or self‑contained unit is exempt from §23 taxation if it was "exclusively used for your own residential purposes" for the entire period between acquisition and sale. There is a second, easier‑to‑meet alternative: if the property was used for your own residence in the year of sale and in the two calendar years immediately before the sale, the sale is also tax‑free. German case law shows courts will apply the calendar‑year logic strictly but flexibly: a continuous use spanning the three calendar years is sufficient and, in limited cases, single‑day use in the outer years combined with continuous use in the middle year has been accepted. See the Federal Fiscal Administration guidance (EStH Anhang 26) and BFH case law for the precise chronology that counts.
Inheritance and transfers by law
Acquisition by inheritance or by other operation of law is expressly addressed in the official guidance. The administrative handbook and practice notes treat an estate acquisition (Erwerb kraft Gesetzes) as an acquisition for §23 purposes: the tax treatment depends on the legal acquisition date and on statutory rules about who bears the acquisition cost. For inherited property, the specific facts determine whether pre‑existing holding periods or cost bases carry over — the official guidance discusses these technical points. Because outcomes depend on how and when the prior owner acquired the asset, consult a German tax adviser before relying on a carry‑over of a long holding period.
How non‑residents are taxed in Germany (limited tax liability)
If you are not resident in Germany, income from German sources (including disposal of immovable property located in Germany) falls within the scope of limited tax liability under German law. Section 49 EStG lists in‑country income items that are taxable for non‑residents; disposal or rental of property located in Germany is covered. Limited tax liability means the disposal can be taxable here even if you live abroad — you will normally have to declare the transaction and pay German tax if §23 applies. Double tax‑treaty rules may alter where tax is finally due, so check the treaty between Germany and your country of residence.
Step‑by‑step: calculate the gain and treat FX before you sell
1) Identify gross sale receipts (brutto) in the currency actually received. 2) Identify acquisition costs and qualifying increases in the asset’s tax base (purchase price, fees, transfer taxes, notary, acquisition‑related improvements). 3) Convert amounts in foreign currency: German law requires you to convert acquisition costs at the exchange rate applicable on the acquisition date and receipts at the rate on the sale date; that is the statutory "Stichtags" approach. If you actually converted money into euro earlier, use the actual conversion rate used for that conversion; otherwise use the appropriate official rate for the respective dates. 4) Compute taxable gain = sale proceeds (EUR at sale date) − acquisition cost (EUR at acquisition date) − allowable sale costs and capitalised improvements. 5) Remember treatment limits: losses from private disposals are restricted in how they may be offset against other income under §23. The resultant gain is taxed as part of your other income under the German income tax scale (progressive rates). Because treaty, withholding and filing rules differ for non‑residents, get a German tax adviser to prepare a pre‑sale calculation and to advise about required German filings.
Practical risks and next steps
Do not assume a sale will be tax‑free simply because you or a family member spent some time living in the flat; the calendar‑year rules and "exclusive" use tests are applied strictly. For non‑residents the German tax authority can require a German tax return and tax payment even if you live elsewhere; treaty relief must be claimed and documented. Currency gains that arise because exchange rates moved between your purchase and sale are usually part of the taxable result under §23, so FX hedging or early conversion decisions can change the tax outcome. Before you sign a sales contract, get a German tax specialist to run the step‑by‑step calculation on your specific numbers and to advise on treaty and filing consequences.
Nothing on this page is investment, tax or legal advice. Price bands are indicative asking prices and disagree between sources by design. Verify every figure with a qualified German notary, tax adviser (Steuerberater) or lawyer before committing capital.
