Capital Gains Tax When Selling Property in Dresden
The 10-year rule (Spekulationsfrist), exemptions and exit planning. Market data for Dresden. LDP Group currently buys in Berlin, Munich, Nuremberg, Erlangen, Fürth, Düsseldorf, Cologne, Stuttgart, Karlsruhe, Frankfurt and Hamburg.
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Capital Gains & Selling in Dresden: what to know
Sell a privately held Dresden property within 10 years of purchase (notary date to notary date) and the gain is taxed at your personal rate: up to 45% plus solidarity surcharge. Hold past 10 years and the entire gain is tax-free. Owner-occupiers exit earlier: occupancy in the sale year plus the two preceding calendar years (partial years count) exempts the gain fully.
Two traps: selling more than three properties within five years risks classification as commercial trading (gewerblicher Grundstückshandel), taxing everything; and prior AfA reduces your cost basis, enlarging the taxable gain on early exits. Model your exit before you buy: it changes the optimal holding structure.
The Dresden market in numbers
Dresden (Saxony) has 571,510 residents. Existing apartments average around €2,970/m² (citywide range roughly €2,490–€4,070/m²), with new-builds at about €6,460/m². Average asking cold rent is about €10.41/m², putting the gross rental yield near 4%.
Price momentum: +4% year-on-year. After a 2022 peak, prices corrected in 2023-24 and returned to growth in 2025-26 (resale flats +4% in 2025, transactions +11% to ~5,080; new-build first sales +11%); asking rents rose ~20% over 5 years (8.70 to 10.41 EUR/m2, 2021-2026).
Vacancy: roughly 6.7% total vacancy, including flats that are not on the market (Kommunale Statistikstelle Landeshauptstadt Dresden, 25.07.2025). The market-active rate is lower, so this figure is not comparable with the market-active rates quoted for most other cities.
Where to buy in Dresden
Loschwitz / Weißer Hirsch, Blasewitz and Äußere Neustadt trade clearly above the city average; that is where investment demand concentrates. Value- and yield-oriented buyers look at Gorbitz and Pieschen, which trade clearly below the city average, where gross yields are usually higher and management takes more work.
Äußere Neustadt (Antonstadt): Dresden's bohemian Gründerzeit quarter north of the Elbe with the city's densest bar, cafe and nightlife scene, popular with students and young professionals. Apartments trade around €3,000–€3,500/m².
Striesen: Leafy late-19th-century villa-and-apartment district east of the centre, a classic family and professional favourite. Apartments trade around €3,100–€3,250/m².
Blasewitz: Prestigious Elbe-side villa district by the Blaues Wunder bridge, among Dresden's most expensive addresses. Apartments trade around €3,200–€3,600/m².
Pieschen: Formerly working-class Gründerzeit district on the Elbe's north bank, now visibly gentrifying with good value relative to Neustadt. Apartments trade around €2,750–€2,850/m².
Gorbitz: Large GDR-era prefab (Plattenbau) estate on the western edge: Dresden's cheapest apartment and rent segment with higher vacancy. Apartments trade around €2,450–€2,650/m².
Loschwitz / Weißer Hirsch: Hillside villa quarters above the Elbe with landmark funiculars and top-end single-family stock: Dresden's premium residential slope. Apartments trade around €3,400–€3,650/m².
The district bands come from separate sources and dates, so some sit outside the citywide range quoted above.
Taxes & buying costs in Dresden
Property transfer tax (Grunderwerbsteuer) in Saxony is 5.5%. Add approximately 2% for notary and land registry (statutory GNotKG fees), so purchase costs come to about 7.5% of the price; buying through an agent adds the buyer's commission (typically 2.98–3.57%). For a standard profile German banks do not finance these costs.
Held privately, the property can be sold tax-free after the 10-year Spekulationsfrist; before that, gains are taxed at your personal rate. Depreciation (AfA) shelters rental income: 2% p.a. for buildings completed 1925–2022 (2.5% before 1925), 3% for buildings completed from 2023, and qualifying new projects started between October 2023 and September 2029 can choose 5% degressive depreciation instead of the linear rate.
General information, not tax advice; LDP Group gives no tax advice.
Dresden is a designated tight housing market: the Mietpreisbremse caps new-lease rents at roughly 10% above the local comparative rent (Mietspiegel), and the reduced Kappungsgrenze limits in-tenancy increases to 15% within three years. Factor the achievable regulated rent, not the asking-rent headline, into your underwriting.
Data & sources
Figures from the sources named below, mostly portal asking prices, checked in July 2026. Asking prices typically run 5–15% above notarised transaction values: where both exist, the source basis is stated.
Population: Landeshauptstadt Dresden (Melderegister/Kommunale Statistikstelle), main residences as of 31.12.2025 (-0.4% YoY), press release Jan 2026.
Purchase prices: Asking prices: immoverkauf24 (Sprengnetter), Q2 2026, city avg 2,970.89 EUR/m2 (+4.01% YoY).
Rents: wohnungsboerse.net Mietspiegel Dresden (asking cold rents), avg 10.41 EUR/m2 as of April 2026.
Yield: ImmoScout24 analysis, gross rental yield existing apartments Dresden: 4.0% (via BFW Newsroom).
Price trend: Gutachterausschuss Dresden 2025 (resale condos 2,610 -> 2,705 EUR/m2, +4%).
Vacancy: Kommunale Statistikstelle Landeshauptstadt Dresden: 20,918 dwellings vacant = 6.7% of stock, reference date 2024 (published 25.07.2025).
Frequently asked questions
Does the 10-year clock restart if I refinance?
No. Refinancing, renovating or re-letting never restarts the Spekulationsfrist: only the acquisition dates in the notarised contracts count. Inherited property inherits the deceased's original acquisition date, often making immediate tax-free sales possible.
Can foreigners buy investment property in Dresden?
Yes. Non-residents can buy property in Dresden without German citizenship or residency. Financing is available to expats and Blue Card holders; non-residents typically need 40–50% equity, while German tax residents usually bring 10–20% of the price (80–90% loan-to-value as standard, up to 100% with a strong income profile), plus the purchase costs in both cases.
What are the total buying costs in Dresden?
On top of the purchase price, budget 5.5% property transfer tax (Saxony) and about 2% notary and land registry, so about 7.5% in total. Where an agent is involved, the buyer's commission (typically 2.98–3.57%) comes on top.
What rental yield can I expect in Dresden?
Gross yields in Dresden average around 4%, higher in value districts such as Gorbitz and Pieschen and lower in prime locations like Loschwitz / Weißer Hirsch.
How much is property per square metre in Dresden?
Existing apartments average about €2,970/m² to buy and roughly €10.41/m² cold rent per month, varying significantly by neighbourhood and condition.