Germany is the rare major market where the tax code explicitly rewards the long hold. The figures below are the baseline assumptions HypeCity's tax engine uses for Germany; state-level variation is real, so verify with a Steuerberater before relying on any single number.

1. Grunderwerbsteuer — transfer tax by state

The land transfer tax is set by each Bundesland and is modeled at ~5% on average — Bavaria sits at the low end and states like Brandenburg and NRW at the high end. Add notary and registration and German closing costs are among Europe's heaviest; with a broker the all-in acquisition stack can exceed 10%. Negotiate accordingly.

2. Grundsteuer — the annual tax, reformed

The annual property tax was re-based in the 2025 reform; we model ~0.5% per year as a working figure, but the municipal multiplier (Hebesatz) makes this genuinely local. Check the current assessment for the specific property — post-reform bills surprised owners in both directions.

3. Rental income — roughly 30% for a typical investor

Rental profit is taxed at your German marginal income-tax rate; for a typical foreign investor the working assumption is ~30%. The good news: Germany is generous with deductions — building depreciation (AfA), loan interest, and maintenance all reduce the taxable base, so the effective rate on a leveraged property is often far lower than the headline.

4. Capital gains — zero after ten years

The Spekulationsfrist is the star of the German tax code: sell a privately held property after a 10-year holding period and the capital gain is tax-free. Sell before, and the gain is taxed as income. For buy-and-hold investors this single rule reshapes strategy — German deals should be underwritten on a 10+ year horizon, which also suits the country's tenant-friendly, low-churn rental market.

Worked example. €452,000 Friedrichshain 2BR bought at €390,000 in 2022: ~€19,500 transfer tax at purchase, ~€2,260/year Grundsteuer, rent taxed at the marginal rate after AfA and interest deductions — and if held to 2032+, the ~€62,000 (and growing) gain exits tax-free. Track exactly this in the Portfolio Command Center, which computes your deal IRR to date and flags the refinance window.

Where in Germany? Check the score, not the hype

HypeCity scores German neighborhoods inside a catalog of 24,051 worldwide — net of this tax layer. Filter the Leaderboard to Germany, or build a lender-ready Deal Memo on a specific listing in four questions.

Underwrite your German deal properly

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Not investment, legal, or tax advice. This article is informational and comparative only. Rates change and individual situations differ — verify every figure with a licensed local professional before transacting.