Real Estate & Investments
German tax advice for real estate and investments
German tax advice and compliance for private real estate, rental property, brokerage accounts, securities, investment funds, company interests and foreign investments.
Private asset taxation
Real estate and investments are subject to different German tax rules
Real estate, securities, investment funds and company interests can receive very different treatment under German income tax law. Relevant factors include the type of asset, its use, the holding period, the percentage ownership and whether the asset is located in Germany or abroad.
For rental property, the main issues typically include rental income, depreciation, financing costs and a later sale. For investments, the focus is generally on dividends, interest, capital gains, investment funds and foreign withholding taxes.
Larger interests in corporations can also be subject to special German rules such as Section 17 EStG. International structures may additionally require analysis under Germany's international tax rules.
Scope of services
German tax advice for real estate and investments
We assist with ongoing tax compliance, individual transactions and more complex domestic and international asset structures.
Rental property
Preparation and review of German taxable rental income.
- Rental income
- Deductible expenses
- Depreciation and depreciation basis
- Financing and interest expense
Property acquisitions
German tax analysis of acquisition costs and preparation for the ongoing tax treatment of the property.
- Purchase-price allocation
- Land and building allocation
- Incidental acquisition costs
- Financing
Sale of real estate
Review of the German income-tax consequences of selling property.
- Section 23 EStG
- Ten-year period
- Owner-occupation rules
- Calculation of taxable gain
Stocks, interest and dividends
German tax reporting and classification of private investment income and securities transactions.
- Dividends
- Interest
- Stock sales
- Loss utilization
Investment funds and ETFs
German tax treatment of domestic and foreign investment funds under the German Investment Tax Act.
- Distributions
- Vorabpauschale
- Partial exemptions
- Capital gains
Foreign brokerage accounts
Preparation of foreign bank and broker information for the German income tax return.
- Dividends and interest
- Capital gains
- Currency conversion
- Foreign withholding tax
Company interests
German tax advice for private interests in German and foreign corporations.
- Distributions
- Section 17 EStG
- Share disposals
- Foreign corporations
Cryptocurrency and digital assets
German tax classification of private transactions involving cryptocurrency and comparable digital assets.
- Purchases and sales
- Exchange transactions
- Holding periods
- Transaction documentation
Asset structuring and planning
Tax analysis of larger real estate, investment and ownership structures before transactions or relocations.
- Sale planning
- Asset transfers
- Holding and ownership structures
- Moving to or from Germany
Real estate taxation
Rental income, depreciation and a later sale
For rental property, taxable income is generally determined by comparing rental receipts with deductible expenses. Depending on the facts, deductible items can include depreciation, financing costs, repairs, management costs and other property-related expenses.
Correct allocation of the purchase price between land and building is already important at acquisition because only the portion attributable to the building is generally depreciable.
A later sale requires a separate review to determine whether a taxable private disposal applies or whether an exemption is available, in particular because of the holding period or qualifying owner occupation.
Investment income
German and foreign brokerage accounts must be reported under German rules
German banks often withhold German investment income tax at source. Nevertheless, a German tax return can still be useful or required, for example because of loss utilization, foreign withholding taxes or special company interests.
Foreign banks and brokers generally do not perform German tax withholding. Their transaction data therefore has to be processed under German tax rules.
Foreign tax reports should not be copied into a German return without review. Cost basis, sale proceeds, fund classification and currency translation can be treated differently under German tax law.
Typical clients
Situations for which this service is designed
Individuals owning one or more rental properties in Germany or abroad.
Individuals holding shares, ETFs, funds, bonds or larger German and foreign brokerage accounts.
Individuals with interests in German or foreign companies and planned share disposals.
Investors and property owners moving to Germany, leaving Germany or holding assets in several countries.
How we work
From documents to German tax reporting
Asset structure
We identify real estate, brokerage accounts, company interests, income categories and international connections.
Documents
Purchase agreements, loan documents, rental records, brokerage statements and tax reports are collected.
German tax analysis
We determine the income, expenses, gains and foreign taxes relevant under German tax law.
Filing and follow-up
The amounts are included in the German tax return and later tax-authority questions or differences in the assessment are reviewed.
Cross-Border Assets
Foreign real estate and investments
Foreign real estate, brokerage accounts, company interests and withholding taxes require coordinated treatment under German tax law and the applicable double tax treaty.
Germany–United States
U.S. real estate, brokerage accounts, stocks, ETFs and company interests must be classified and reported under German rules for a German tax resident.
- U.S. rental real estate
- U.S. stocks and brokerage accounts
- Investment funds and PFIC coordination
- Withholding taxes and treaty treatment
Germany–Switzerland
Swiss real estate, brokerage accounts and company interests can create both German and Swiss tax issues.
- Real estate and rental income
- Swiss brokerage accounts and investment income
- Swiss withholding tax
- Residence and tax treaty
Frequently asked questions
Real estate and investments on a German tax return
How is rental income taxed in Germany?
Is the sale of privately held real estate always taxable in Germany?
Do foreign brokerage accounts have to be included in a German tax return?
Can I use my foreign broker's tax report directly?
How are ETFs taxed in Germany?
Do you advise on real estate and investments in the U.S. or Switzerland?
Contact
Let us discuss your real estate and investments.
During the initial consultation, we review your real estate, brokerage accounts, company interests, planned transactions, international connections and expected German tax advisory needs.