Capital Gains Tax When Selling Property in Dresden
The 10-year rule (Spekulationsfrist), exemptions and exit planning. Verified opportunities in Dresden with English-speaking notary, financing and tax support.
Schedule Free ConsultationIllustrative estimate at a 3.8% assumed interest rate (10y fixed, June 2026 market range 3.6–3.9%) plus 2% initial amortisation. Actual terms depend on the property, your profile and the lender. Not financial advice.
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 three or more 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 (Sachsen)) has 571,510 residents. Existing apartments currently average around €2,971/m² (district spread roughly €2,487–€4,065/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% (Kommunale Statistikstelle Landeshauptstadt Dresden: 20,918 dwellings vacant = 6.7% of stock, reference date 2024 (published 25.07.2025), …). Above-average vacancy means micro-location and stock quality decide letting success here.
Where to buy in Dresden
Investment demand concentrates in Äußere Neustadt, Striesen, Blasewitz, where letting is fastest and long-term value is most defensible. Value- and yield-oriented buyers look at Gorbitz and Loschwitz / Weißer Hirsch, which trade lower and typically deliver higher gross yields with more management intensity.
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.
Taxes & buying costs in Dresden
Property transfer tax (Grunderwerbsteuer) in Saxony (Sachsen) is 5.5%. Add approximately 2% for notary and land registry (statutory GNotKG fees) plus any brokerage/service fee — total acquisition costs typically run 8–12% on top of the purchase price, and German banks generally do not finance them.
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 pre-2023 buildings, 3% for buildings completed from 2023, and a 5% degressive option for qualifying new projects started before 30.09.2029.
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
All figures verified July 2026 against primary sources. 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, https://www.bfw-newsroom.de/immo-scout24-br….
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, German tax residents 10–20%.
What are the total buying costs in Dresden?
On top of the purchase price, budget 5.5% property transfer tax (Saxony (Sachsen)), about 2% notary and land registry, plus any brokerage/service fee — commonly 8–12% of the price in total.
What rental yield can I expect in Dresden?
Gross yields in Dresden average around 4%, higher in value districts such as Gorbitz and Loschwitz / Weißer Hirsch and lower in prime locations like Äußere Neustadt.
How much is property per square metre in Dresden?
Existing apartments average about €2,971/m² to buy and roughly €10.41/m² cold rent per month, varying significantly by neighbourhood and condition.