Real estate regulations and tax rules for German property owners

Purchasing a rented property with the intention of moving in involves significant legal and tax considerations in Germany. For buyers in areas like Heilbronn, the transition from buyer to landlord only occurs upon official entry into the land register, not merely at the notary appointment. Only after this transfer can a new owner issue a notice of termination based on personal need.

Termination notices must be written, specific, and provide clear reasons regarding the person moving in and their concrete housing needs. Notice periods vary based on the duration of the tenancy; for example, a tenant residing in a property for nine years is entitled to a nine-month notice period.

From a tax perspective, property owners must navigate the ten-year speculation period to avoid capital gains tax on sales. If a rented property is sold within ten years of purchase, the profit is subject to taxation under § 23 Abs. 1 Satz 1 Nr. 1 EStG. However, profits may remain tax-free if the property was used continuously for personal residential purposes or if the owner lived in the property for at least the three years preceding the sale. The Federal Fiscal Court (BFH) has confirmed that the calculation of this period is based on the dates stipulated in the official notary contracts.