The speculation tax is levied on the profit resulting from the difference between the purchase price and the sale price of a property, less the costs incurred. This applies to private sales transactions in accordance with § 22 No. 2 in conjunction with § 23 of the Income Tax Act (EStG). The tax is calculated at the seller's personal income tax rate.

The speculation period is generally ten years. If a property is sold within this period, it is assumed that the sale is aimed at a short-term increase in value. This ten-year period applies to properties acquired after 31 December 1998.

However, there are exceptions where speculation tax does not apply: The sale of owner-occupied residential property is exempt if the property was used exclusively for own residential purposes in the year of sale and in the two preceding years. In the case of inheritances and gifts, the date of acquisition by the previous owner applies. The sale of property as part of a business asset is also not affected.

There are ways to avoid or minimise speculation tax. These include strategically planning the time of sale in order to avoid the speculation period, or using the property for your own residential purposes in order to take advantage of the exemption.

The speculation tax on property sales can have a significant impact on the profit realised. It is therefore advisable to familiarise yourself with the regulations at an early stage and, if necessary, to seek expert advice in order to optimise your tax burden.