“No private sale transaction in the case of sale of an owner-occupied dwelling and short-term rental.”

If a property is sold within 10 years of its acquisition, any gain realized in the process is subject to income tax (so-called private sale transaction). On the other hand, the sale is tax-free if the property was previously used for the owner’s own residential purposes. According to the wording of the law, it is sufficient if there is owner-occupancy “in the year of the sale and in the two preceding years” (Sec. 23 (1) No. 1 Sentence 3 EStG).

Self-use does not even have to exist for the entire three-year period prior to the sale. Although the use must be given in a continuous period of time. However, according to the case law of the Federal Fiscal Court, it is sufficient if the self-use takes place in the complete year prior to the sale (the “middle” calendar year); however, in the first of the 3 years and in the year of sale, one day of self-use is sufficient in each case. If these conditions are met, the tax exemption of the sale is not jeopardized even if, for example, an apartment is otherwise rented out for a few months in the year of the sale.