Taxes
Germany — Tax: Capital Gains
Investment capital gains (stocks, funds, interest, dividends) fall under the flat Abgeltungsteuer of 25% plus 5.5% solidarity surcharge (26.375% combined; ~27.8-28% for church tax payers), with a €1,000/person (€2,000/couple) annual tax-free allowance (Sparerpauschbetrag). Property is taxed differently: a private property sale is completely tax-free if held over 10 years, or if the owner lived in it for the 2 years before selling; otherwise gains within the 10-year window are taxed at the seller's personal income tax rate. Cryptocurrency is uniquely favorable — held over 1 year, gains are entirely tax-free (treated as a 'private sale' rather than a capital asset); held under 1 year, gains are taxed at personal income tax rate with a separate €1,000 tax-free allowance for short-term private sales.
Key facts
- Investment gains (stocks/funds/interest/dividends): flat 26.375% (25% + 5.5% solidarity surcharge), ~27.8-28% with church tax, with a €1,000/€2,000 annual allowance (Sparerpauschbetrag).
- Property: tax-free after a 10-year holding period, or if owner-occupied for the 2 years before sale; otherwise taxed at personal income tax rate within the 10-year window.
- Cryptocurrency held over 1 year: completely tax-free (treated as private sale, not capital asset).
- Cryptocurrency held under 1 year: taxed at personal income tax rate, with a separate €1,000 tax-free allowance for short-term private sales.
Required documents
- Brokerage/exchange transaction records
- Property purchase/sale contracts and occupancy history
Common mistakes
- Applying the 25% Abgeltungsteuer flat rate to property gains — property uses a completely different regime (holding-period exemption or personal tax rate).
- Selling cryptocurrency just under the 1-year holding mark, missing out on the complete tax exemption available at the 1-year threshold.