Leaving Germany (Wegzugsbesteuerung)

The frightening term is about companies, not your flat

Wegzugsbesteuerung under §6 AStG is an exit tax on substantial shareholdings in companies, roughly, a stake of one percent or more in a corporation. When someone gives up German tax residency, the law can treat those shares as sold on the day of departure and tax the gain on paper.

A rental apartment you own in your own name is not a company share, and it is not within that rule. So set the term aside. The questions that actually affect a property owner who leaves are simpler, and all about income and timing.

Your German rental income stays taxed in Germany

German tax treaties almost universally give the right to tax income from real estate to the country where the property sits. Your German rent is taxed in Germany whether you live in Berlin, London, or Singapore. That part does not change when you move.

What changes is the second layer: your new home country may also want to tax that same rental income. Whether it does, and whether it credits the German tax already paid or exempts the income entirely, depends on the treaty between Germany and that country. In the worst case the rent is taxed in Germany and then topped up to a higher home-country rate, so your after-tax yield falls even though the property itself has not changed.

Your filing shifts too. As a resident you had unbeschränkte Steuerpflicht, worldwide income assessed in Germany. As a non-resident you move to beschränkte Steuerpflicht, where only your German-source income, the rent, is assessed here. The available deductions and the shape of the Steuererklärung change with it, and you keep filing a German return every year the property is let.

The ten-year clock keeps running

The Spekulationsfrist does not pause when you leave. A property bought five years before a move is still governed by the same ten-year holding period, and a sale by a non-resident owner in year eight is taxed in Germany on the full gain at the German rate, just as it would be for a resident. Move away and sell early, and you owe the tax you would have owed had you stayed.

This is why the timing of a move matters. Selling before you go, holding and renting across the move, or waiting out the ten years from abroad are three different tax outcomes, and the right one depends on where you sit in the clock and where you are going.

Where pre-move planning actually matters

A few decisions land most heavily before the move, not after:

• Where you sit in the ten-year Spekulationsfrist when you move, year three and year eight give very different flexibility
• Whether to sell before leaving, hold and rent across the move, or sell later from abroad
• How your Zinsbindung lines up with the move date, since refinancing from abroad is harder
• How your new country taxes German rental income, and whether it credits or exempts the German tax already paid

These choices depend heavily on the specific country and treaty, so this is a place to sit down with a Steuerberater who handles cross-border cases before the move rather than after.

Where this often goes wrong

Two patterns recur in real cases.

First: a property bought at year zero, treated as a long-hold, then a job offer arrives at year five. The owner moves, rents the property out remotely for a few years, then sells at year eight to free up the equity. The gain, undiminished by the Spekulationsfrist exemption, is fully taxed in Germany at the (non-resident) seller's German rate. With pre-move planning, the same outcome could often have been timed or structured differently.

Second: an owner moves to a country whose treaty with Germany credits but does not exempt German tax on real estate income. The annual rental income is taxed in Germany, and the home country adds whatever incremental tax its own rate produces. Without planning, this can mean the after-tax yield in the new country is materially lower than what the owner experienced as a German resident.

What comes next

Next, where real estate fits in the rest of your financial picture.