Capital Gains Tax When Selling Property in Munich
The 10-year rule (Spekulationsfrist), exemptions and exit planning. LDP Group buys in Munich and works with English-speaking partner notaries. FM Zinswerk, an independent mortgage broker licensed under § 34i GewO, advises on and brokers the loan; the tax structure is set by the tax firm Helm & Partner before the notary date; LDP prepares the file and coordinates.
Book a free screening callIllustrative estimate at a 4.3% assumed interest rate (10y fixed, from our rate table, refreshed every two weeks) plus 2% initial amortisation. Actual terms depend on the property, your profile and the lender. Not financial advice.
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Capital Gains & Selling in Munich: what to know
Sell a privately held Munich 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 Munich market in numbers
Munich (Bavaria) has 1,612,429 residents. Existing apartments average around €8,200/m² (citywide range roughly €7,290–€12,620/m²), with new-builds at about €10,470/m². Average asking cold rent is about €21.44/m², putting the gross rental yield near 3.2%.
Price momentum: +1.5% year-on-year. After peaking in 2021/22 (immowelt: €9,309/m² in 2021), apartment prices corrected sharply in 2022–23 (−6.4% and −11.5%) and have been recovering moderately since 2024 (+2.6% in 2024, +1.5% in 2025), still roughly 14% below the 2021 peak (2025 average €8,035/m² vs €9,309/m²).
Vacancy: roughly 0.1% (CBRE-empirica-Leerstandsindex 2025, empirica regio, Dec 2025). That is effectively full occupancy: supply scarcity drives both rents and letting speed.
Where to buy in Munich
Ludwigsvorstadt-Isarvorstadt and Schwabing-West trade clearly above the city average; that is where investment demand concentrates.
Schwabing-West: Classic Altbau boulevards around Elisabethplatz and Hohenzollernstraße; Munich's archetypal upscale-bohemian quarter with a perennially liquid resale market. Apartments trade around €8,110–€13,130/m².
Ludwigsvorstadt-Isarvorstadt (incl. Glockenbachviertel): Trendy inner-city district around Gärtnerplatz and the Glockenbach scene quarters; nightlife, creative industries and the strongest rental demand in the city. Apartments trade around €8,470–€14,630/m².
Maxvorstadt: Museum and university quarter (LMU, TUM, Pinakotheken); dense Altbau stock and small units in constant student and academic demand; district avg €11,231/m².
Au-Haidhausen: Village-like 'Franzosenviertel' east of the Isar with cobbled squares and a gastro scene; Milieuschutz (Erhaltungssatzung) areas are widespread here; district avg €9,995/m².
Sendling: Formerly working-class quarter around the Großmarkthalle, now a gentrifying mid-price entry point close to the Isar and Theresienwiese; district avg €8,258/m².
Obergiesing: Munich's classic up-and-coming district on the east-bank terraces; still one of the cheaper inner districts and a favourite for yield-oriented buyers; district avg €7,636/m².
The district bands come from separate sources and dates, so some sit outside the citywide range quoted above.
Taxes & buying costs in Munich
Property transfer tax (Grunderwerbsteuer) in Bavaria is 3.5%. Add approximately 2% for notary and land registry (statutory GNotKG fees), so purchase costs come to about 5.5% of the price; buying through an agent adds the buyer's commission (typically 2.98–3.57%), while LDP purchases carry no additional broker fee (Maklerprovision) on top of the price. 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: the tax structure is set by the tax firm Helm & Partner (Steuerberater) before the notary date, and LDP prepares the purchase figures and coordinates.
Munich 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: Statistisches Amt der Landeshauptstadt München (residents with primary residence, 31.12.2025, +0.5% YoY), 2026.
Purchase prices: ImmoScout24 WohnBarometer Q3 2025 (existing-stock asking price €8,200/m²), 01.10.2025.
Rents: immowelt Mietpreise München (asking cold rent, apartments, as of 01.07.2026; full-year 2025 avg €20.57/m², +4.9% YoY).
Yield: computed from price+rent above (immowelt July 2026: €21.44 × 12 / €8,078 = 3.18%). Munich is Germany's lowest-yield major market.
Price trend: immowelt price history (2025: €8,035/m² vs 2024: €7,913/m² = +1.5%), July 2026.
Vacancy: CBRE-empirica-Leerstandsindex 2025 (market-active vacancy, data year 2024; Munich tied with Frankfurt and Freiburg as lowest in Germany; national avg 2.2%), empirica regio, Dec 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 Munich?
Yes. Non-residents can buy property in Munich 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 Munich?
On top of the purchase price, budget 3.5% property transfer tax (Bavaria) and about 2% notary and land registry, so about 5.5% in total. Where an agent is involved, the buyer's commission (typically 2.98–3.57%) comes on top; LDP purchases carry no additional broker fee.
What rental yield can I expect in Munich?
Gross yields in Munich average around 3.2%, lower in prime locations like Ludwigsvorstadt-Isarvorstadt.
How much is property per square metre in Munich?
Existing apartments average about €8,200/m² to buy and roughly €21.44/m² cold rent per month, varying significantly by neighbourhood and condition.