Property · Germany–Switzerland
Selling Swiss property while living in Germany
If you live in Germany and sell property in Switzerland, you need to coordinate two tax systems. Switzerland may tax the property gain because the property is located there. Germany also assesses the sale under German income tax law, particularly section 23 of the German Income Tax Act (EStG). Unlike many other treaty situations involving property, the Germany–Switzerland tax treaty generally applies the credit method to gains from private disposals.
Basic framework
A sale may have tax implications in both countries
Switzerland taxes property located within its territory on the basis of its location. The gain on disposal is generally subject to cantonal real estate gains tax.
If you also have a residence in Germany and are therefore generally subject to unlimited German income tax liability, the sale must additionally be assessed under German tax law. For property held as a private asset, section 23 EStG is particularly relevant.
The Germany–Switzerland tax treaty gives Switzerland the right to tax gains from immovable property. For privately held property, however, this does not automatically result in exemption in Germany. Instead, the credit method under Article 24(1), no. 3 of the Germany–Switzerland tax treaty (for periods up to and including 2025: no. 2) generally needs to be considered.
Swiss taxation
Switzerland taxes property gains where the property is located
Gains from the disposal of Swiss property held as a private asset are generally subject to cantonal real estate gains tax. The actual tax burden therefore depends heavily on the canton, the holding period and the cantonal rules for calculating the taxable gain.
The property’s canton determines the rules
Real estate gains tax is linked to the location of the property. Depending on the canton, the tax may be levied by the canton, the municipality or both.
Calculating the Swiss gain
The calculation typically starts with the sale proceeds, investment costs and expenditure that increases the property’s value. The precise calculation follows cantonal law.
A short holding period can be costly
In many cantons, the period of ownership affects the tax rate. Gains from short-term ownership may be taxed substantially more heavily than gains from property held for longer periods.
No direct federal tax on private property gains
Gains from property held as a private asset are generally not subject to direct federal tax. Cantonal real estate gains tax nevertheless continues to apply.
German income tax
In Germany, section 23 EStG must be assessed first
If the Swiss property is held as a private asset, its sale may constitute a private disposal transaction under section 23(1), first sentence, no. 1 EStG.
The sale generally falls outside section 23 EStG
If more than ten years elapse between acquisition and disposal, the sale of privately held property generally no longer falls within section 23(1), first sentence, no. 1 EStG.
Swiss real estate gains tax may still apply. The fact that Germany does not recognise a taxable gain does not remove Switzerland’s right to tax.
The disposal gain may be taxable in Germany
If the property is sold within ten years, a potentially taxable private disposal gain generally needs to be calculated.
Exceptions apply, in particular, where the property meets the requirements for use for the owner’s own residential purposes.
Exception for use as your own home
A sale may be exempt even within the ten-year period if the property was used exclusively for your own residential purposes between acquisition or completion and sale, or if it was used for your own residential purposes in the year of sale and the two preceding calendar years.
Rental properties generally require assessment within the ten-year period
The exemption for personal residential use generally does not apply to a rented Swiss property. A sale within the ten-year period therefore requires particularly careful assessment.
A second home or holiday home may also qualify
Under the case law of the German Federal Fiscal Court (BFH), a second home or holiday home used personally only from time to time may also meet the requirements for personal residential use, provided it is not intended for letting and remains available for the taxpayer’s own use.
Germany–Switzerland tax treaty
Article 13 gives Switzerland taxing rights – Article 24 governs relief in Germany
Article 13(1) of the Germany–Switzerland tax treaty provides that gains from the disposal of immovable property may be taxed in the country where the property is located. For Swiss property, that country is Switzerland.
This does not yet determine how Germany, as the country of residence, avoids double taxation. That question is governed by Article 24 of the treaty.
Privately held Swiss property
For an ordinary Swiss property held as a private asset, the exemption under Article 24(1), no. 1 generally does not apply.
The credit method
Where the exemption provision does not apply, Article 24(1), no. 3 (up to and including 2025: no. 2) generally provides for a credit, subject to German law, for Swiss tax charged in accordance with the treaty and not eligible for a refund.
No automatic treaty exemption
A German taxpayer should therefore not assume that a sale of Swiss property is exempt from German tax solely because of Article 13.
Special cases: permanent establishments and fixed bases
Article 24(1), no. 1 contains special exemption rules for certain cases involving permanent establishments and independent professional activities. These situations must be distinguished from ordinary private property ownership.
Calculating the gain under German law
How is the German taxable disposal gain calculated?
Section 23(3) EStG generally starts with the sale price less acquisition or construction costs and disposal costs. For property previously let, depreciation already claimed also affects the calculation.
Sale price
The starting point is the sale proceeds relevant under German tax law. Amounts in Swiss francs must be converted into euros using a consistent approach.
Acquisition and construction costs
The purchase price, incidental acquisition costs and, where applicable, subsequent capitalised construction costs must be determined under German rules.
Depreciation on rental property
To the extent that depreciation has been taken into account in calculating income for German tax purposes, it reduces acquisition or construction costs under section 23(3) EStG and may therefore increase the taxable gain on sale.
Disposal costs
Costs directly connected with the sale must be assessed separately when calculating the gain under German law.
Credit for Swiss tax
The credit for Swiss real estate gains tax is not unlimited
To the extent that the sale is taxable in Germany under section 23 EStG, it is necessary to determine how much of the Swiss tax charged in accordance with the treaty and not eligible for a refund can be credited against German income tax.
No unlimited tax credit
The German tax credit is limited to the amount permitted under German law. A high Swiss real estate gains tax liability will therefore not automatically be credited in full in Germany.
More than ten years or qualifying personal residential use
If the sale is not taxable in Germany under section 23 EStG, no German tax arises on that gain against which Swiss tax would need to be credited.
Retain the Swiss tax assessment
The German tax assessment will require, in particular, purchase and sale documents, the Swiss real estate gains tax assessment and evidence of payment.
Federal Fiscal Court case law
Key decisions relevant to property sales
The relevant case law does not centre on a single leading BFH decision specifically concerning a German resident’s private sale of Swiss property. However, several decisions are directly relevant to the assessment under section 23 EStG and to the treaty framework.
Second homes and holiday homes can qualify for personal residential use
The BFH held that a property can be used for the owner’s own residential purposes even if it is occupied only from time to time. This may include, in particular, second homes and holiday homes not intended for letting.
This case law may be decisive for Swiss holiday properties sold within the ten-year period.
The binding purchase and sale contracts determine the ten-year period
In 2026, the BFH confirmed its established case law: whether a disposal takes place within the ten-year period depends on when the binding acquisition and disposal contracts are concluded, rather than the later transfer of economic ownership.
The exact dates of the purchase and sale contracts should therefore be documented carefully, particularly in cross-border property transactions.
The personal residential use exemption and parts of a plot
The BFH confirmed that the exemption for personal residential use may also cover the land belonging to an owner-occupied building, provided the land and building remain connected in their use and function. If an undeveloped part is separated and sold independently, that connection may cease to exist.
Article 24 of the Swiss treaty distinguishes exemption from a tax credit
In a decision concerning income from Swiss property, the BFH explained the structure of Article 24 of the Germany–Switzerland tax treaty. Exemption applies only within the categories expressly specified there. Outside those categories, the credit method applies.
For private property sales, this is an important reason not to assume that income from Swiss property is always exempt from German tax.
Checklist
Documents needed when selling Swiss property
Purchase contract
Purchase date, purchase price, incidental acquisition costs and original financing.
Sale contract
Contract date, sale price, estate agent’s fees and other disposal costs.
History of use
Personal residential use, letting, holiday use and periods of vacancy throughout the period of ownership.
Property improvements
Evidence of improvements that increased the property’s value, renovations and subsequent capitalised construction costs.
German rental income records
Depreciation previously claimed and German income calculations if the property was let.
Swiss tax assessment
Real estate gains tax assessment and evidence of payment for determining the German tax credit.
Related topics
Further information
Germany–Switzerland tax advice
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