Buying property abroad from Germany

Trade, capital and payment flows with other countries are free in principle, subject to the limits set by the Foreign Trade and Payments Act or by ordinance under it.

A resident must report to the Deutsche Bundesbank a payment above EUR 50,000 made to or received from a non resident, including a payment for a home abroad; transfers between the resident's own accounts are not reported. The statutory exemptions list payments up to EUR 50,000, goods, short term credit and interest on foreign bonds, and do not list property purchases.

50,000 EUR per per payment

1 January 2025

The report is due by the seventh working day of the month after the payment; it must describe the underlying transaction with the code from the Bundesbank service list.

The payment report asks for the underlying transaction (section 67(5) AWV), so a home purchase is identified by its purpose; no rule read restricts or approves the purpose of buying a foreign home.

• A person with a home or habitual abode in Germany is taxed on worldwide income, and rent from immovable property abroad is foreign income (sections 1(1), 2(1) and 21 of the Income Tax Act; section 34d no.
• 7).
• Foreign income tax that is comparable to German income tax is credited against the German tax on that income, or deducted from the income on request (section 34c(1) and (2)).
• Where a double tax treaty exempts the rent, it is exempt in Germany but counted in setting the rate (section 32b(1) no.
• 3), except that this rate effect does not apply to rent from property in a state that is not a third state (section 32b(1) sentence 2 no.
• 3).

• A sale of land or buildings within ten years of purchase is a taxable private disposal gain, and the wording of section 23 does not limit it to German property.
• Property used only as the owner's own home between purchase and sale, or in the year of sale and the two years before, is excluded.
• A total gain below EUR 1,000 in a year is tax free, and a sale after ten years falls outside the rule.

Germany has not levied the general wealth tax (Vermögensteuer) since 1 January 1997; the law was not repealed, but it has not been applied since the 1995 Constitutional Court decision.

Relief is a credit for comparable foreign income tax or a deduction on request (section 34c), and exemption with a rate effect where a treaty provides it (section 32b). The size of the treaty network is not stated in a source that could be read.

Persons with unlimited liability to German income tax and foreign income

None stated for foreign income in the statutes read

Seven months after the end of the calendar year unless a tax law says otherwise (section 149(2) of the Fiscal Code); section 149(3) sets a different period when a tax professional prepares the return

Yes

Residents making or receiving a payment with a non resident

Above EUR 50,000 per payment

Seventh working day of the month after the payment

No

Residents who hold at least 10 percent of the shares or voting rights of a foreign company, or control one

10 percent of shares or voting rights

Period set in section 71(1) AWV

only through accounts or entities

Any taxpayer whose return involves facts abroad

None

With the return or on request of the tax office

Yes