The seller's side of the transaction: the fees that fall on the seller, the two dates that decide the tax, the discount a tenant costs, and a worked example that says wait two years.
Quick answer
The seller pays about 3 to 4 percent agent commission plus a few hundred euros for charge release and energy certificate. The gain is tax-free once ten years lie between the notarised contracts, or after three calendar years of self-use; earlier it is taxed.
What the seller pays, and what the buyer pays
German practice puts most transaction costs on the buyer: transfer tax, the notary's fee for the purchase contract, and the land registry entry are all the buyer's. The seller's side is shorter, but it is not zero.
| Item | Typical amount | Basis |
|---|---|---|
| Agent commission, seller's share | 3.57% in most states, 3.12% in Hamburg, 2.98% in Bremen, Hesse and Mecklenburg-Vorpommern, each including VAT | §§ 656a to 656d BGB: since 23 December 2020 a consumer buyer pays at most half, so the seller pays at least half; conventions, not law |
| Release of the mortgage charge (Löschung der Grundschuld) | roughly 0.2% of the registered charge amount, split between notary and land registry | GNotKG; needed unless the buyer takes over the charge |
| Energy performance certificate (Energieausweis) | €50 to €150 for a consumption certificate, €300 to €500 for a demand certificate | § 80 GEG: must be shown at the viewing and handed over at completion; fines for non-compliance |
| Prepayment penalty on an early loan repayment | zero to several percent of the outstanding balance, depending on the rate gap and the remaining fixed period | § 502 BGB; not payable after the ten-year termination right of § 489 Abs. 1 Nr. 2 BGB |
| Documents: land registry extract, declaration of division, minutes, service charge statements | €10 to €50 each | requested by every serious buyer and by the buyer's bank |
| Income tax on the gain | zero or the full progressive rate on the gain | § 23 EStG, next section |
Two of those lines are decisions rather than costs. Whether to pay an agent at all is one: a let flat sold to an investor, or a flat sold to the sitting tenant, often needs no agent, and the seller's 3.57 percent is then simply not incurred. The prepayment penalty is the other, and it is the one that has moved most since 2022.
A loan fixed at 1.2 percent in 2020 and repaid in 2026, when the bank can relend at around 3.5 percent, carries no penalty worth the name: the bank's loss from early repayment, which is what § 502 BGB lets it charge, is negative. A loan fixed at 4 percent in 2024 and repaid in a lower-rate environment carries a real one. And any loan fully disbursed more than ten years ago can be terminated with six months' notice under § 489 Abs. 1 Nr. 2 BGB without penalty, whatever the contract says. The seller's question is therefore not "how much is the penalty" but "what is the rate gap and how old is the loan", and the answer decides whether the sale should wait for the loan's tenth anniversary.
The tax: two notary dates, ten years apart
A privately held property sold outside the ten-year window of § 23 Abs. 1 S. 1 Nr. 1 EStG produces no taxable gain. Inside the window the gain is ordinary income at the seller's progressive rate, and for a seller abroad it is caught by § 49 Abs. 1 Nr. 8 EStG in exactly the same way. Three details decide more cases than the rule itself.
- The clock runs from contract to contract. Both the acquisition and the sale are dated by the notarised obligation, not by payment, handover or land registry entry. A purchase contract signed on 15 March 2016 allows a sale contract from 16 March 2026. A sale contract signed on 14 March 2026 with completion in June is inside the window, however long the handover takes.
- Depreciation comes back. Under § 23 Abs. 3 S. 4 EStG the gain is the sale price less selling costs less the acquisition cost reduced by the AfA taken. Eight years of 2 percent depreciation on a €300,000 building are €48,000 that reduced rental income and now increase the gain by the same amount, at the same marginal rate. Inside ten years depreciation is a deferral; outside, a saving.
- The self-use exemption has a three-calendar-year shape. The gain is exempt if the property was used exclusively as the owner's home from purchase to sale, or if it was so used in the year of sale and the two preceding years (§ 23 Abs. 1 S. 1 Nr. 1 S. 3 EStG). The Bundesfinanzhof held in 2017 (IX R 37/16) that only the middle year must be a full year: moving in on 31 December 2024 and selling on 2 January 2026 satisfies it. A period of letting before the self-use kills the first alternative permanently and leaves only the three-year one.
Two smaller rules: gains below €1,000 in a calendar year are exempt (§ 23 Abs. 3 S. 5 EStG, a threshold, not an allowance: at €1,001 the whole gain is taxable), and a loss on a sale inside ten years can be set only against other gains of the same kind, in the same year or carried back one year or forward (§ 23 Abs. 3 S. 7 and 8 EStG), never against salary or rent. Selling at a loss inside the window therefore produces no refund; it produces a loss that waits for a gain.
The three-object limit sits behind all of this. An owner who sells more than three properties within about five years of buying them is presumed to be trading, and then § 23 no longer applies at all: the gains are business income, trade tax is due, and the properties are reclassified as current assets, which strips the depreciation. The presumption comes from the Bundesfinanzministerium's letter of 26 March 2004 and the Grand Senate decisions behind it, not from a paragraph, and the Bundesfinanzhof confirmed in March 2025 (III R 14/23) that crossing year five does not automatically make a fourth sale harmless.
What a sitting tenant changes
A sale does not end a tenancy. Under § 566 BGB the buyer steps into the lease on the day of the land registry entry, with the same rent, the same deposit obligations and the same notice protection. That is why a let flat trades at a discount to an identical vacant one, typically 10 to 25 percent in the large cities depending on how far the rent sits below market. The seller has three ways to deal with it.
- Sell to an investor at the discount. Fastest, no agent needed if the seller has a buyer pool, and the rent history is the sales document. The LDP model sits on this side of the transaction, which is the reason we write it down plainly.
- Sell to the tenant. Where a rented building was converted into condominiums after the tenancy began, § 577 BGB gives the tenant a statutory right of first refusal on the first sale; even where it does not apply, the tenant is the one buyer who pays no discount for occupancy and needs no agent.
- Sell with vacant possession. Only possible if the tenant leaves voluntarily or the owner has a lawful ground to terminate, and for a converted flat § 577a BGB blocks termination for own use for three years after the conversion, extended by state ordinance to ten years in Munich, Berlin and most tight markets. A payment to the tenant for leaving is lawful and common; it is also a selling cost the seller should net against the vacancy premium before offering it.
What a seller should not do is describe a flat as "free from 1 January" on the strength of a conversation with the tenant. A buyer's bank values the flat as let until the lease is legally ended, and a contract that promises vacant possession the seller cannot deliver becomes the seller's liability.
Selling from abroad: signature, money, timing
The contract must be notarised in Germany (§ 311b Abs. 1 BGB), but the seller need not attend. The standard route is a power of attorney or an approval declaration signed abroad before a German consular officer or a local notary, with an apostille under the Hague Convention where the country is a member, and translated where the officer requires it. The notary drafts the text; the seller signs it in Singapore or Toronto; the deed is executed in Germany by a representative, usually a notary's clerk. Allow three to six weeks for the document round trip, longer in countries without the apostille.
Money follows the notary's timetable, not the buyer's. After signing, the notary registers a priority notice for the buyer (Auflassungsvormerkung, § 883 BGB), collects the bank's release for the seller's charge and any municipal waivers, and only then issues the payment notice. The buyer pays the price, the seller's bank is paid off out of it, and the balance goes to the seller's account, which can be abroad. Possession passes on the day agreed for payment; ownership passes on the land registry entry weeks later. From listing to money in the account, four to six months is normal for a flat with a clean file, and a missing declaration of division, an unregistered Grundschuld release or a tenant dispute each add a month.
Tax follows the seller too. A non-resident seller inside the ten-year window files the gain in Germany; a non-resident seller outside it files nothing in Germany but may owe capital gains tax at home, because most countries tax their residents on worldwide gains and credit or exempt the German side under the treaty. The German exemption after ten years is a German rule, and it does not travel.
Worked example: a Berlin flat, sold in year eight or year ten
A flat bought in Berlin in March 2018 for €350,000, financed and let since, is offered €480,000 in 2026. Acquisition costs in Berlin were 6 percent transfer tax, about 2 percent notary and land registry and 3.57 percent agent commission, and the building share is taken as 75 percent. The seller's marginal rate is 42 percent.
| Line | Sale in 2026 (year 8) | Sale in 2028 (year 10 passed) |
|---|---|---|
| Sale price | €480,000 | €480,000 |
| Agent commission, seller's share 3.57% | €17,140 | €17,140 |
| Charge release and certificate | €700 | €700 |
| Acquisition cost including purchase costs (€350,000 x 1.1157) | €390,500 | €390,500 |
| AfA taken: 2% x 75% x €390,500 x years | €46,860 (8 years) | not added back |
| Taxable gain: price minus selling costs minus (cost minus AfA) | €118,520 | €0 |
| Income tax at 42% | about €49,780 | €0 |
| Net proceeds before loan repayment | about €412,380 | about €462,160 |
Waiting two years is worth roughly €50,000 on this flat, before any price change. That is more than two years of net rent, and it is why the decision on this page is usually not "sell or hold" but "sell now or sell at the tenth anniversary", with the loan's own ten-year date checked alongside so that the prepayment penalty does not eat what the tax exemption saved. The example ignores the solidarity surcharge and assumes no other § 23 gains or losses in the year.
Limitations and what we do not know
- We are a property investment firm, not tax or legal advisers. The rules above are checked against the statutes as of September 2026; the specific gain, the loan penalty and the treaty position of a seller abroad need a professional with the actual documents.
- The 10 to 25 percent occupancy discount is our reading of the large-city market in 2026 and is not a measured figure; it varies with the gap between contract rent and market rent and with the tenant's age and lease term.
- Prepayment penalties depend on each bank's calculation method and the yield curve on the day; we give no figure because any figure would be wrong by the time it is read. Courts have also voided penalties where the bank's contractual information was inadequate, which is a question for the loan documents.
- The three-object limit is applied case by case; the numbers three and five are presumptions from administrative guidance and case law, not statutory thresholds, and a single large development can count as more than one object.
- We have not covered sales by a company, sales of a whole building with several units, or the transfer tax consequences of selling shares in a property company, all of which follow different rules.
What would change this answer
- A change to § 23 EStG; shortening or abolishing the ten-year exemption for let property has been proposed repeatedly and would turn every worked example on this page around.
- A change to the agent commission rules of §§ 656a to 656d BGB, or a market shift in the convention on who pays.
- A new Bundesfinanzhof decision on the three-object limit or the self-use exemption; both areas produce a new judgment most years.
- A move in mortgage rates large enough to flip prepayment penalties from negligible to material, which changes the timing advice for loans fixed after 2022.
Frequently asked questions
How much does it cost to sell an apartment in Germany?
For the seller, mainly the agent commission share, 3.57 percent including VAT in most states and less in Hamburg, Bremen, Hesse and Mecklenburg-Vorpommern, plus a few hundred euros for releasing the mortgage charge and the energy certificate. Transfer tax, the notary's contract fee and the land registry entry are paid by the buyer. A prepayment penalty on the loan can add several percent of the outstanding balance or nothing at all, depending on the rate gap.
When is the sale of a German property tax-free?
When more than ten years lie between the notarised purchase contract and the notarised sale contract (§ 23 EStG), or when the owner lived in the property either throughout or in the year of sale and the two preceding calendar years, of which only the middle one must be complete. Inside ten years and without self-use, the gain is taxed as ordinary income at the seller's progressive rate.
Does depreciation increase the tax on the sale?
Yes, if the sale is inside the ten-year window. § 23 Abs. 3 S. 4 EStG computes the gain from the acquisition cost reduced by the AfA taken, so eight years of 2 percent depreciation on a €300,000 building add €48,000 to the taxable gain. After ten years the gain is exempt and the depreciation is a permanent saving.
Can I sell a flat in Germany with a tenant in it?
Yes. The buyer takes over the lease unchanged under § 566 BGB, which is why a let flat sells at a discount to a vacant one. A tenant in a flat converted to a condominium after the tenancy began has a right of first refusal on the first sale under § 577 BGB, and termination for own use is blocked for three to ten years after conversion under § 577a BGB depending on the city.
Do I have to be in Germany to sell my property?
No. The contract is notarised in Germany, but the seller can sign a power of attorney or an approval declaration abroad before a German consular officer or a local notary with an apostille, and a representative signs in Germany. Allow three to six weeks for the documents and four to six months from listing to money in the account for a flat with a clean file.
Is a non-resident taxed in Germany when selling a German flat?
Inside the ten-year window yes, under § 49 Abs. 1 Nr. 8 EStG, on the same gain calculation as a resident. Outside the window Germany taxes nothing, but the seller's country of residence may tax the gain under its own rules; the German ten-year exemption does not carry over to another tax system.
Sources
- § 23 EStG, private Veräußerungsgeschäfte (gesetze-im-internet.de)
- § 49 EStG, beschränkt steuerpflichtige Einkünfte, Abs. 1 Nr. 8
- § 656c BGB, Lohnanspruch bei Tätigkeit für beide Parteien (agent commission split)
- § 656d BGB, Vereinbarungen über die Maklerkosten
- § 566 BGB, Kauf bricht nicht Miete
- § 577 BGB, Vorkaufsrecht des Mieters
- § 577a BGB, Kündigungsbeschränkung bei Wohnungsumwandlung
- § 489 BGB, ordentliches Kündigungsrecht des Darlehensnehmers
- § 502 BGB, Vorfälligkeitsentschädigung
- § 311b BGB, Verträge über Grundstücke (notarial form)
- § 883 BGB, Vormerkung
- § 80 GEG, Ausstellung und Verwendung von Energieausweisen
- LDP glossary: Nebenkosten and agent commission conventions by state, verified 2026
- LDP glossary: Vorfälligkeitsentschädigung, how banks calculate it
- LDP decision page: the ten-year rule, the three-calendar-year exemption and the three-object limit with case references
Related
- Spekulationssteuer: the ten-year rule in the glossary
- Should you buy if you might leave Germany in five years?
- What actually reduces tax on the rent
- Inheritance tax when the heirs live abroad: the heir inherits the ten-year clock
- Vorfälligkeitsentschädigung: the prepayment penalty explained
- Mietpreisbremse: what rent regulation does to the price of a let flat