Selling a Tenanted Apartment in Germany: Tenant Rights, Vorkaufsrecht, and Tax Timing

Most landlord content in Germany is about buying, financing, and operating. Selling gets surprisingly little airtime, considering it is the single largest financial event in the life of a rental property. The mechanics are deceptively simple. You sign a Notarvertrag, the buyer pays, the land registry updates. What separates landlords who exit cleanly from landlords who lose 5 or 10% of their sale price is everything that happens around that contract: the legal status of the sitting tenant, the right of first refusal, the Spekulationssteuer math, the buyer profile decision, and the choice of whether to sell occupied or vacant.

This guide walks through the four decisions that determine whether your exit nets you the maximum or 25% less than it should.

Decision 1: Vacant or tenanted?

The single biggest financial decision in selling a rental property is whether the buyer takes the apartment with a tenant in place or empty.

Empirical 2026 data from ImmoScout24 and the BVR Immobilien Marktreport: a tenanted apartment in Berlin sells at an average 20 to 28% discount vs the comparable vacant unit. Munich is in the 18 to 25% range. Frankfurt and Hamburg around 15 to 22%. Smaller B-cities tend to a narrower 10 to 18% spread because the investor buyer pool relative to owner-occupiers is larger.

The discount has two drivers:

• The buyer pool changes. Owner-occupiers (who pay full price) drop out almost entirely. The only realistic buyers are Kapitalanleger (capital-investor landlords), and their valuation is a function of yield, not emotional value.
• The yield-based price has a hard ceiling. A €1,200/month cold rent at a 4% gross yield supports €360,000, regardless of comparable owner-occupier valuations of similar apartments at €450,000 or €500,000.

If you can deliver the apartment vacant, you keep the full market price. If you cannot, you accept the investor-priced number.

The cost of getting to vacant varies enormously by tenant situation:

• Tenant naturally moves out: zero cost, just time.
• Tenant agrees to leave for a buyout (Abfindung): typically 3 to 12 months of rent, with sliding scale by city.
• Eigenbedarfskündigung: legally possible but increasingly difficult, requires genuine personal-use need, blocked entirely in tight markets for 3 to 10 years after conversion to Eigentum (Sperrfrist under § 577a BGB).
• Sperrfrist still running: no termination right at all, must sell tenanted.

Three rough buckets for landlords:

Decision 2: Manage the Vorkaufsrecht

§ 577 BGB grants the tenant a right of first refusal (Vorkaufsrecht), but only in one specific scenario: the apartment was a rental at the time the tenant moved in, and the building was subsequently converted into Wohnungseigentum (separate apartment units), and the apartment is now being sold for the first time after that conversion.

This is a narrow case. Most apartments owned by individual landlords were already Eigentumswohnungen when bought, so the Vorkaufsrecht does not apply. Where it does apply, the legal mechanics are strict.

The process:

1. Notarised purchase contract is signed with the third-party buyer.
2. Within a short timeframe, the seller (or notary) sends the tenant a copy of the full contract along with a written notice that triggers the Vorkaufsrecht.
3. The tenant has 2 months from receipt of this notice to declare exercise of the right (also notarised).
4. If exercised, the tenant becomes the buyer at the exact terms the third party agreed to.
5. If not exercised within 2 months, the third-party sale proceeds.

Important exceptions where the Vorkaufsrecht does not apply, even on first sale after conversion:

• Sale to family members in direct line (spouse, parents, children, grandchildren).
• Sale to the tenant themselves (obviously).
• Sale in the context of a bulk transaction (entire building sold to one buyer).

Most landlords get the Vorkaufsrecht wrong by failing to send the proper notice, which exposes them to damages from the tenant if the tenant would have exercised. Practical rule: if there is any possibility the Vorkaufsrecht applies, have the notary handle the notice as part of the closing.

Decision 3: Run the Spekulationssteuer math

§ 23 EStG taxes capital gains on the sale of property held for less than 10 years. The gain is added to your taxable income and taxed at your full marginal rate, which can be 40 to 45%.

The 10-year clock runs from the date in the original notarised purchase contract. Sell one day before the 10-year mark and the full gain is taxable. Sell one day after and the gain is tax-free.

The math is significant. A €100,000 gain at a 42% marginal rate is €42,000 in tax if sold inside 10 years, €0 if sold after.

Important exceptions:

• Owner-use exception (Eigennutzung). If you used the apartment yourself in the year of sale and the two preceding calendar years, the gain is tax-free regardless of the 10-year clock. The “use” requirement is strict and means actually living there as your main residence. Brief stays don’t count.
• Inheritance and gift. The original purchase date carries through to the heir or recipient. If your parent bought the apartment in 2010 and you inherit in 2025, you reach the 10-year mark in 2020 (already past), not 2035.
• Three-property rule (Drei-Objekt-Grenze). If you sell more than three properties within 5 years, the Finanzamt may reclassify your activity as gewerblicher Grundstückshandel (commercial property trading), which strips the 10-year exemption entirely and brings additional taxes. Stay below three sales in any rolling 5-year window if you can.

For your specific sale:

Sale price:                  €450,000
Less: original cost basis:  -€300,000
Less: closing costs paid:    -€30,000
Less: documented capex:      -€10,000
Less: selling costs:         -€20,000  (agent, notary, etc.)
─────────────────────────────────
Taxable gain:                 €90,000
× Marginal rate (42%):        €37,800 in tax owed

If you can wait until past the 10-year mark, that €37,800 stays in your pocket. The decision is rarely about whether to wait, but for how long.

Practical impact: a property bought in late 2016 reaches the Spekulationsfrist in late 2026. If you are considering selling and you are within 6 to 18 months of the 10-year mark, the tax saving is often larger than the carrying cost of waiting.

Decision 4: Choose the buyer profile

Two distinct buyer pools exist for a tenanted apartment:

Kapitalanleger (capital investor)

A private investor or small landlord looking for yield. Buys based on the cash flow the property delivers, the energy efficiency class, and the location quality. Pays the discounted “investor price”.

Typical Kapitalanleger logic:

• Cold rent × 12 / purchase price = gross yield. Target 4 to 5% for B-cities, 3 to 4% for A-cities.
• Energy class A or B = pays a premium of 5 to 10%.
• Energy class F or G = discounts a further 10 to 15%.
• Sitting tenant with rent significantly below market = treated as a problem, discounted further.
• Sitting tenant with at-market or above-market rent = treated as a win, may even pay a small premium.

Owner-occupier (Selbstnutzer)

Only realistically buys if the apartment can be delivered vacant. Pays based on the full market price for the location.

For most tenanted apartments, the realistic pool is only the Kapitalanleger. Marketing to Selbstnutzer with the promise of “tenant will leave soon” is risky because the tenant may not, and the deal collapses at the last minute.

The exception is when the existing tenant has already given notice. Then you can market to Selbstnutzer with a confirmed delivery date.

The sale process step by step

1. Pre-listing: prepare the documentation pack

A buyer (and their financing bank) will ask for:

• The current lease, plus all amendments and rent increase notices.
• The last 2 to 3 Nebenkostenabrechnungen.
• The Energieausweis (mandatory to disclose since 2014).
• The Teilungserklärung and Gemeinschaftsordnung for the WEG.
• The last 3 Eigentümerversammlung minutes.
• The Hausgeldabrechnung for the last 2 years and current Wirtschaftsplan.
• The Instandhaltungsrücklage balance.
• Floor plans and dimensions.
• Proof of the original purchase price (to support the buyer’s later Anlage V AfA calculation).

A clean documentation pack signals professionalism and is often the difference between a 6-week sale and a 6-month one.

2. Listing: price for the right buyer pool

If selling tenanted, price on yield logic. The fastest way to attract serious investor interest is to lead with the yield calculation: “€1,200/month rent, asking €330,000, gross yield 4.4%”. This filters owner-occupiers out and brings investors in.

If selling vacant, price on the location comparable. Look at sold-comparables for similar size, condition, and street.

3. Tenant communication

If your tenant is staying through the sale, you owe them basic professionalism. Best practice:

• Inform the tenant in writing before listing begins. Not legally required, but breeds cooperation.
• Schedule showings in defined windows. Tenants have a duty under § 535 BGB to allow reasonable showings but must be given advance notice (typically 24 to 48 hours).
• Offer a viewing-coordination arrangement. Some tenants want to be present; some prefer the landlord handle it solo.
• Do not denigrate the tenant’s lease or rent level to prospective buyers in front of the tenant. Awkward and counterproductive.

A cooperative tenant can make the sale 10 to 20% faster. An obstructive tenant can delay it by months and reduce the achievable price.

4. Notarised contract

The Kaufvertrag is signed at the notary. Both parties attend (or send authorised representatives). The contract includes:

• Property description and Grundbuch reference.
• Purchase price and payment terms.
• Disclosure of the existing tenancy and lease terms.
• Allocation of pre-payments (rent received in advance, Mietkaution).
• Closing conditions (financing, Vorkaufsrecht waiver if applicable).

The Mietkaution must be transferred to the buyer with proper documentation. This is not a refund to the tenant; it follows the lease into the buyer’s hands.

5. Vorkaufsrecht notice (if applicable)

Within days of the contract signing, the notary sends the tenant the full contract and the formal Vorkaufsrecht notice. The 2-month clock starts.

If the tenant exercises, the deal restarts with the tenant as buyer at identical terms. The original buyer drops out (usually with a clause permitting this scenario).

If the tenant does not exercise within 2 months, the original buyer proceeds.

6. Closing and Grundbuch transfer

After payment, the notary handles the Grundbuch update. From the date of registration, the buyer is the legal owner and steps into the landlord position under § 566 BGB (“Kauf bricht nicht Miete”, literally “sale does not break the lease”).

The buyer takes the existing lease as it stands. Rent levels, deposit amount, term, all of it transfers unchanged. The buyer cannot use the sale to terminate the tenant; that would require an independent ground (Eigenbedarf, with Sperrfrist constraints).

The Sperrfrist trap

§ 577a BGB prohibits the new owner from terminating the tenant for personal use (Eigenbedarf) or “economic use” (better use of the property) for a defined period after the property was converted from rental to Eigentumswohnung.

The federal default is 3 years, but Länder can extend it. In tight markets the periods are:

• Bavaria: 10 years in designated areas.
• North Rhine-Westphalia: 8 years in most large cities.
• Berlin: 10 years city-wide.
• Hamburg: 10 years city-wide.

If you are selling a recently converted apartment to a Selbstnutzer who plans to move in, this is the biggest legal trap. The Sperrfrist follows the apartment, not the seller. The new owner cannot terminate the tenant until the period expires. Marketing to Selbstnutzer in this situation is borderline fraud unless the Sperrfrist is fully disclosed.

For apartments that have been Wohnungseigentum since long before the current tenancy, the Sperrfrist usually does not apply. Verify before listing.

Worked exit example

Landlord owns a Berlin 75 m² apartment, bought 2017 for €280,000, paid €30,000 in closing costs. Current cold rent €1,250/month. Tenant in place since 2019, low rent vs market. Energy class D. Considering sale in late 2026.

Tax position:

• Acquisition date 2017, Spekulationsfrist passes mid-2027.
• Selling in 2026: tax payable on gain at marginal rate.
• Selling in mid-2027 or later: tax-free.

Vacant price target:

• Current Berlin comparable: €5,500/m² × 75 = €412,500.
• Less: 5% selling costs (€20,625).
• Net to landlord: €391,875.

Tenanted price target:

• Cold rent €15,000/year.
• Yield-based at 4.0%: €375,000.
• Apply 22% sitting-tenant discount: actual investor offers cluster around €322,000.
• Less: 5% selling costs (€16,100).
• Net to landlord: €305,900.

Spread: vacant nets €391,875, tenanted nets €305,900. Vacant is €86,000 more.

Tax on the gain (selling 2026 vacant):

• Gain calc: €412,500 minus €280,000 minus €30,000 minus €20,625 = €81,875.
• At 42% marginal: tax of €34,388.
• Net after tax: €391,875 minus €34,388 = €357,487.

Tax on the gain (selling 2027 vacant, past Spekulationsfrist):

• Gain calc: same ~€82,000, but tax-free.
• Net after tax: €391,875.

The right play here: wait until the Spekulationsfrist passes in mid-2027. Negotiate an Abfindung with the tenant in the meantime, sell vacant in late 2027. The combined effect of vacant price plus tax-free gain is worth roughly €130,000 over selling tenanted in 2026.

If the tenant refuses any Abfindung and the Sperrfrist is still active, the realistic choice collapses to tenanted in 2027 (post-Spekulationsfrist, no tax), netting €322,000 minus €16,100 = €305,900 tax-free.

Common landlord mistakes

1. Selling inside the Spekulationsfrist by months when waiting would have made the gain tax-free.
2. Marketing to Selbstnutzer when the tenant is unlikely to leave and the Sperrfrist is active.
3. Failing to issue a proper Vorkaufsrecht notice through the notary. Damages claim from the tenant if they would have exercised.
4. Mispricing tenanted apartments at the vacant comparable price and watching them sit unsold for months.
5. Treating the Mietkaution as the seller’s money. It belongs to the tenancy and must transfer to the buyer with documentation.
6. Underestimating the value of energy class. A jump from D to B can add 10% to the sale price; the inverse is also true.
7. Selling without a clean documentation pack. Buyers walk away or use missing documents to negotiate the price down.
8. Forgetting the three-property rule. Multiple sales within 5 years can convert a private exit into a gewerblicher Grundstückshandel with severe tax consequences.
9. Letting tenant relations deteriorate during the sale process. An obstructive tenant blocks showings and tanks the achievable price.
10. Assuming the buyer’s bank will overlook anything. They review the Hausgeld and Wirtschaftsplan in detail. A weak Instandhaltungsrücklage often becomes a price negotiation lever.

Decision framework

Use this in order:

1. Where are you relative to the Spekulationsfrist? If under 10 years, calculate the tax cost of selling now vs the carrying cost of waiting. Often, waiting wins.
2. Can the apartment be delivered vacant? If yes, the price ceiling is 20 to 30% higher. Determine the cost (tenant Abfindung, timing).
3. If selling tenanted, is the existing rent at market or below? Above-market rents may attract investor premium; well-below-market rents will cap the buyer pool at the most aggressive yield-seekers.
4. Does the Vorkaufsrecht apply? Verify before contract signing. Handle through the notary.
5. Is the Sperrfrist still active? If yes, marketing to Selbstnutzer is misleading. Stick to Kapitalanleger.
6. What is the Energieausweis class? Class A or B properties may sell quickly even tenanted. F or G may need a full energetic upgrade or a heavier discount.
7. What is the local investor yield expectation? Use this to set the asking price for the tenanted scenario.

How this fits the wider landlord lifecycle

Selling is the bookend to the buying-side content you’ve already read:

• The closing cost calculator you used at purchase becomes relevant in reverse: those costs you paid in 2017 are part of your cost basis for the Spekulationssteuer calculation.
• The AfA calculator tells you what’s already been depreciated; the remaining book value affects the gain calculation.
• The rental yield calculator tells you what an investor buyer will pay based on your current rent and Hausgeld structure.
• The hidden costs accumulated over the years feed into the documented capex line on the gain calculation.
• The Mietkaution you held in trust transfers to the buyer at closing.

For most landlords, the property is the largest single asset in their portfolio. The sale is the largest single liquidity event. The difference between a well-executed exit and a sloppy one is often 10 to 20% of the asset value, more than a year of net rent. Spending the equivalent of one weekend planning the exit pays back at a rate no other landlord task can match.