Real estate
Swiss residence · Rental property in GermanyGerman rental income after moving to Switzerland
If a property situated in Germany continues to be rented out after you move to Switzerland, the rental income generally remains relevant for German tax purposes. Moving abroad changes neither the location of the property nor automatically the way German taxable income is calculated. Key issues include limited tax liability, rental receipts, depreciation (AfA), loan interest, maintenance expenses, vacancy periods and the German tax return.
Basic rule
Swiss residence does not end German taxation of your property
After effectively giving up German residence and moving to Switzerland, you may no longer be subject to unlimited German income tax liability. However, a rental property in Germany can continue to generate German-source income.
Section 49 of the German Income Tax Act (EStG) covers income from renting and leasing immovable property situated in Germany. Germany therefore remains relevant for the taxation of ongoing rental income.
Even after the change of residence, the German property must continue to be assessed under German rules on income from renting and leasing.
Scope of this article
This article focuses on ongoing German rental taxation
This article assumes that German residence has actually been given up. Whether that is the case must first be assessed separately.
- Giving up residence → separate guidance on the basic rules
- Limited tax liability → general framework covered separately
- This article → ongoing German rental taxation
- Sale of the property → separate property article
- Swiss reporting → TaxRep.ch
Limited tax liability
Why Germany can continue to tax the rental income
Individuals with neither a residence nor a habitual abode in Germany are subject to limited income tax liability under section 1(4) EStG if they earn German-source income within the meaning of section 49 EStG.
Section 49 EStG provides a basis for German taxation of a rental property situated in Germany. Establishing a new residence in Switzerland generally does not change this.
Swiss residence
After departure, the individual is resident outside Germany for tax purposes.
Property in Germany
The land and the rental property remain situated in Germany.
German-source income
The rental activity can continue to give rise to German income tax.
Further guidance on limited tax liability
The basic rules under sections 1(4) and 49 EStG are explained in Limited tax liability in Germany .
Income calculation
How is German rental income calculated after departure?
The basic approach remains the same: deductible income-related expenses are subtracted from the receipts relevant for tax purposes.
German rules continue to apply. Moving to Switzerland does not mean that rental income is now calculated under Swiss rules for German income tax purposes.
| Item | German tax treatment | Effect of moving abroad |
|---|---|---|
| Rental receipts | Receipts from renting and leasing that are relevant for tax purposes. | Generally no change in the calculation method. |
| Service charges | Charges received from tenants and the corresponding expenses are recorded under the general rules. | The change of residence does not alter the basic approach. |
| Depreciation | Depreciation is calculated under German tax rules. | Generally no new depreciation basis solely because of departure. |
| Loan interest | Generally deductible as an income-related expense if economically connected with the rental activity. | The connection with the property remains decisive. |
| Repairs | Classified as maintenance expenses or, where applicable, capitalised construction or improvement costs under German rules. | No special rule applies solely because the owner lives in Switzerland. |
| Management | Property-related management costs may be deductible expenses. | Their allocation generally remains unchanged. |
Depreciation
Moving to Switzerland does not create a new depreciation basis
A change of tax residence alone generally does not result in the German rental property being treated as newly acquired for income tax purposes.
The relevant historical acquisition or construction costs, the allocation between land and building, and the depreciation history therefore remain essential.
Acquisition costs
The historical tax basis should remain fully documented.
Purchase price allocation
Generally, only the portion attributable to the building is depreciable.
Continuing depreciation
Depreciation generally continues under the existing German tax treatment.
Do not assume an automatic step-up
Moving to Switzerland generally does not automatically reset the depreciation basis of the German rental property to its current market value.
Deductible expenses
Loan interest, repairs and ongoing property costs
Expenses economically connected with earning German rental income remain important after departure.
Loan interest
Loan interest may be deductible if the loan is economically attributable to the rental property.
Maintenance
Repairs and maintenance are assessed under German rules on the classification of expenditure.
Management
Property management, tax advice and other property-related expenses may be relevant.
Other costs
Insurance, costs that cannot be passed on to tenants and other property expenses should be reviewed.
Moving abroad does not change the economic allocation
For financing costs, a key question is how the borrowed funds were actually used. The owner’s subsequent move does not automatically change that original use of funds.
Vacancy & personal use
What happens if the property is temporarily not rented out?
A temporary vacancy does not automatically bring the income-producing activity to an end. However, continued genuine intention to let is important for the deduction of expenses.
If, instead, the property is kept available for the owner’s personal stays in Germany after departure, this may also raise a residence question under section 8 of the German Fiscal Code (AO).
Vacancy with an intention to let
Expenses may generally remain deductible during vacancy periods if the intention to let continues and can be substantiated.
Personal use
If the home is kept available for personal stays, the income calculation and residence for tax purposes must be assessed separately.
Retaining a home can jeopardise the intended end of German tax residence
If German residence is intended to end, deregistration with the local authorities cannot be the sole basis for that conclusion. A German home that remains actually available may continue to be relevant for tax purposes.
Assess residence questions separately
Further details: German tax residence despite moving abroad .
Additional assessment
Could an application under section 1(3) EStG be beneficial?
Individuals who no longer have a residence in Germany but continue to earn German-source income may, under certain conditions, apply to be treated as subject to unlimited income tax liability.
In particular, the statutory income thresholds in section 1(3) EStG must be met. This is especially relevant where a substantial proportion of total income remains subject to German income tax.
Income proportion
One route is available where at least 90% of income is subject to German income tax.
Alternative threshold
Alternatively, income not subject to German income tax may fall within the statutory threshold.
Supporting evidence
Foreign income must be substantiated to the German tax office with the appropriate evidence.
Not automatically more favourable
Whether section 1(3) EStG is beneficial and applicable at all depends on the total German and foreign income. It should therefore be assessed as part of the individual’s annual tax assessment, beyond the property income calculation alone.
German tax return
The rental property remains within the German tax assessment process
If taxable German rental income continues after departure, it must still be reported to the German tax office.
The income calculation continues to follow German rules on renting and leasing. Anlage V, the rental income schedule, is the principal form for reporting the property’s income and expenses.
Income tax return
German tax liability is reported to the competent tax office through the assessment process.
Anlage V
Rental receipts, depreciation and deductible expenses for the property are recorded here.
Swiss residence
Swiss residence and, where applicable, other income may be relevant to the individual’s tax status.
Anlage V and general filing questions
Anlage V forms part of the reporting for this rental activity. General filing questions are covered under Tax returns & reporting obligations .
Swiss tax treatment
This article covers the German tax position
How the German property is taken into account in the Swiss tax return of its now Swiss-resident owner is a separate Swiss tax question.
This includes Swiss reporting, the international allocation of tax factors and the Swiss treatment of the property’s value, income, debts and loan interest.
The Swiss perspective on TaxRep.ch
The Swiss treatment is covered separately in German property while living in Switzerland (in German) .
Checklist
Documents for German taxation of rental income
Acquisition documents
Purchase agreement, incidental acquisition costs and purchase price allocation.
Depreciation
Historical depreciation calculations and previous tax returns.
Rental receipts
Tenancy agreement, payments and service charge statements.
Financing
Loan agreement, interest statements and evidence of how the funds were used.
Property costs
Repairs, management fees, insurance and other expenses.
Vacancy periods
Letting efforts and evidence of the continuing intention to let.
Departure
Departure date, giving up German residence and arrival in Switzerland.
Other income
Where needed for an assessment under section 1(3) EStG, details of all German and foreign income.
Assessment sequence
Assess a German rental property after departure in eight steps
Residence
Check whether unlimited German tax liability has actually ended.
Tax status
Assess limited tax liability and, where applicable, section 1(3) EStG.
Receipts
Record all rent and service charge payments.
Depreciation
Continue using the historical depreciation basis.
Expenses
Review loan interest, repairs and other deductible expenses.
Vacancy periods
Document the intention to let during periods without tenants.
Tax return
Report the property’s net income or loss in the German tax return.
Future planning
Assess a later sale or personal use separately.
Frequently asked questions
German rental income while living in Switzerland
Do I still have to pay German tax on my German property after moving?
Why does Germany retain taxing rights?
Do I still have to file a German income tax return?
Is the property revalued after departure?
Can I continue claiming depreciation?
Can I continue deducting loan interest?
Are repair costs still deductible after moving?
What applies during vacancy periods?
What happens if I use the property personally after moving?
Can section 1(3) EStG apply while I live in Switzerland?
Do I also have to declare the German property in Switzerland?
What happens if I sell the property later?
Further reading
German property after moving abroad
Germany–Switzerland tax advice
Do you live in Switzerland and continue to rent out a property in Germany?
We handle the German tax position: limited tax liability, income from renting and leasing, depreciation, loan interest, deductible expenses, the German tax return and planning for a later sale.
Get advice on your German rental income