Anyone who sells a property at a profit within the speculation period must pay tax on it – however, it is not the sale price that is taxed, but solely the capital gain. The amount of speculation tax therefore depends on two factors: the amount of this gain and your personal tax rate. We show you how to determine the taxable gain, which tax rate applies, and what a specific example calculation looks like.
What Is the Speculation Tax?
The speculation tax is not a separate type of tax, but ordinary income tax on what is known as a private disposal transaction under Section 23 of the Income Tax Act (EStG). It applies if you sell a property again within ten years of purchasing it and have not occupied it yourself during this period – typically, therefore, in the case of rented or vacant properties.
That is precisely why there is no fixed “speculation tax rate” of, for example, 25 percent. The gain increases your taxable income and is taxed at your individual tax rate. The actual amount of tax therefore always results from two steps: first, the capital gain is determined, and then the personal tax rate is applied to it. We cover the details of the ten-year period and the exceptions for owner-occupation in separate articles – this article deals solely with the amount of tax.
How Is the Capital Gain Determined?
The basis for the tax is the gain, not the purchase price. Under Section 23(3) of the EStG, the capital gain is the difference between the sale price on the one hand and the acquisition costs and income-related expenses on the other. The basic formula is:
Capital gain = sale price − acquisition costs − income-related expenses
To calculate correctly, you should know what is included in the individual items:
- Sale price: the price agreed in the notarized purchase agreement that you achieve upon sale.
- Acquisition costs: not only the original purchase price, but also the ancillary purchase costs – namely real estate transfer tax, notary and land registry fees, as well as a broker’s commission paid upon purchase. Subsequent production costs, such as an extension, also count.
- Income-related expenses: the costs directly connected with the sale, for example the broker’s commission whenSale, listings, a valuation report, the energy performance certificate or an early repayment penalty for early repayment of the loan.
Important for rented properties: If you rented out the property and claimed depreciation (depreciation for wear and tear, or AfA for short) for tax purposes, this subsequently reduces your acquisition costs (§ 23 paragraph 3 sentence 4 EStG). The amounts depreciated during the rental period therefore mathematically increase your profit. Many sellers overlook this – it can noticeably increase the tax burden.
If the total profit from private sales transactions in a calendar year remains below the exemption limit of 1,000 euros, it remains tax-free. Attention: This is an exemption limit, not an allowance. As soon as the profit reaches 1,000 euros, the full amount is taxable – not just the portion exceeding the limit.
What is the tax rate?
The calculated profit is added to your other taxable income – for example, from your job – and taxed at your personal income tax rate. This rate is progressive, meaning: The higher your total income, the higher the rate applied to the profit.
For 2026, the following framework applies to the income tax schedule (§ 32a EStG):
- No income tax is payable up to the basic tax-free allowance of 12,348 euros (single persons) or 24,696 euros (married couples filing jointly).
- Above this, the rate rises progressively from 14 percent.
- The top tax rate of 42 percent applies to single persons from taxable income of 69,879 euros (for joint assessment, from 139,758 euros).
- From 277,826 euros, the so-called wealth tax rate of 45 percent applies.
Because the sales profit is added to your other income, it can push you into a higher tax bracket. A high profit is therefore often taxed at the top rate of 42 percent, even if your regular income would otherwise be taxed at a lower rate.
Two surcharges on income tax may also apply:
- Solidarity surcharge: 5.5 percent of income tax. It is only payable once income tax exceeds the exemption limit of 20,350 euros (single persons) or 40,700 euros (joint assessment) (§ 3 SolzG). A large capital gain can push you over this threshold.
- Church tax: 8 or 9 percent of income tax, depending on the federal state, provided yousubject to church tax.
Example calculation: Speculation tax on a profit from a sale
An example makes the calculation tangible. Suppose you sell a rented condominium seven years after purchasing it—i.e., within the speculation period:
- Sale price: 420,000 euros
- Acquisition costs: Purchase price of 300,000 euros plus 30,000 euros in ancillary purchase costs (real estate transfer tax, notary, land register) = 330,000 euros
- less depreciation (AfA): Over seven years of renting, you depreciated 5,000 euros annually, 35,000 euros in total. This reduces the acquisition costs to 295,000 euros.
- less income-related expenses: Broker’s commission, energy performance certificate and advertisements for the sale = 15,000 euros
This results in the taxable profit:
420,000 euros − 295,000 euros − 15,000 euros = 110,000 euros
Your personal tax rate is then applied to these 110,000 euros. If your income is already in the top tax bracket, the profit will be taxed at 42 percent:
110,000 euros × 42% = 46,200 euros in speculation tax
The solidarity surcharge and church tax may also be added. If your personal tax rate were lower, for example 30 percent, the same profit would result in approximately 33,000 euros in tax. The figure shows that the same profit can result in a very different tax burden depending on income.
What increases or reduces the taxable profit
The amount of tax can be influenced because it is based on the profit. These factors have an effect:
- Increases the profit – high appreciation: The greater the difference between the purchase and sale prices, the higher the taxable profit.
- Increases the profit – depreciation claimed: Depreciation from renting reduces the acquisition costs and thus increases the profit.
- Increases the tax – high personal tax rate: Those who already earn well will tax the profit in the top bracket; the solidarity surcharge and church tax may also apply.
- Reduces the profit – complete acquisition costs: Include all ancillary purchase costs and subsequent production costs in the calculation.
- Reduces the profit – deductible selling costs: Broker’s commission, appraisals, advertisements, energy performance certificate and an early repayment penalty reduce the profit.
- Reduces the tax – low income in the year of sale: If the sale takes place in a year with low other income, a lower tax rate applies.
FAQ on the amount of speculation tax
Is there a fixed speculation tax rate?
No. Unlike withholding tax on investment income, there is no flat rate. The capital gain is added to your taxable income and taxed at your personal tax rate – progressively between 14 and 45 percent in 2026.
Is the sales price or the profit taxed?
Only the profit is taxed, i.e. the difference between the sales price and the acquisition costs adjusted for income-related expenses. The sales price alone is not the tax base.
How does depreciation (AfA) affect the tax?
If you have depreciated the rented property over the years, these amounts reduce your acquisition costs. This increases the taxable profit – and with it the tax. Therefore, be sure to add back the AfA claimed.
From what profit is speculation tax due?
If the total profit from private sales transactions in a year remains below 1,000 euros, it remains tax-free. From 1,000 euros, the full profit is taxable, as this is an exemption limit rather than a tax-free allowance.
Can I deduct the selling costs?
Yes. Costs directly related to the sale – such as broker’s commission, energy certificate, advertisements or a valuation report – qualify as income-related expenses and reduce the taxable profit.
Conclusion: Calculate the profit first, then the tax rate
The amount of speculation tax is not based on a fixed percentage, but on two steps: First, determine the capital gain from the sales price, acquisition costs and income-related expenses – for rented properties, including the AfA added back. Then apply your personal tax rate, which in 2026 is up to 42 or 45 percent, plus any possible surcharges. Anyone who carefully records all deductible items and plans the sale well can significantly influence the tax burden. For larger amounts, it is worthwhile having a tax advisor perform the specific calculation.