Germany property tax for foreigners: on the way in, every year, on the rent, on the way out.

What is the property transfer tax in Germany?

Grunderwerbsteuer, a one-off tax on buying. The federal default rate is 3.5%, but each state sets its own. In 2026 it runs from 3.5% in Bavaria to 6.5% in Brandenburg, NRW, Saarland and Schleswig-Holstein. Berlin and Hesse charge 6.0%, Hamburg 5.5%, Baden-Württemberg 5.0%.

The buyer can be registered as owner only after the tax is paid or secured and the tax office issues its clearance certificate (§ 22 GrEStG). Every state's rate: Germany property buying costs.

How does the annual property tax (Grundsteuer) work in Germany?

Since 1 January 2025 the reformed Grundsteuer is property value times a tax rate (Steuermesszahl) times a municipal multiplier (Hebesatz), and each municipality sets its own multiplier. The states do not all use the same model, so the same flat can carry different tax in two cities.

• Own models: Baden-Württemberg, Bavaria, Hamburg, Hesse, Lower Saxony.
• Federal model, modified rates: Berlin, Bremen, Saarland, Saxony (Thuringia from 2027).
• Differentiated municipal rates allowed: NRW, Rhineland-Palatinate, Saxony-Anhalt, Schleswig-Holstein.

A landlord may pass the Grundsteuer on to residential tenants as an operating cost (§ 2 No. 1 BetrKV).

How is rental income taxed for a non-resident landlord in Germany?

Rent from German property is German-source income for a non-resident (§ 49 EStG). It is taxed at the normal progressive rates but without the basic tax-free allowance, and only expenses connected with the German income are deductible (§ 50 EStG). There is no withholding on residential rent; the owner files an annual return.

A solidarity surcharge of 5.5% of the tax applies above an exemption threshold (EUR 19,950 of tax for a single person, 2025 figure).

Is there capital gains tax on selling property in Germany?

Only if you sell within 10 years of buying. A gain on private real estate is taxable only inside that window (the Spekulationsfrist), unless the property was used solely as your own home, or as your home in the year of sale and the two years before. Non-residents are caught by the same 10-year rule.

A taxable gain is added to your German income at progressive rates, not taxed at a flat rate (§ 49(1) No. 8 EStG). Total private-sale gains below EUR 1,000 a year have been tax-free since 2024. The exit in full: selling property in Germany as a foreigner.

Does my home country's tax treaty change German property tax?

It can change where else you are taxed, but German property income and gains generally stay taxable in Germany. Germany's treaties broadly follow the OECD model on this point. This page did not check treaties one by one, so confirm the treaty between Germany and your country of residence before you file.

The question to put to a tax adviser in your home country: how the German tax is credited against your home tax on the same rent or gain.

Header photo: Michielverbeek, CC BY 4.0, via Wikimedia Commons. All credits: image credits.