Becoming a private landlord in Germany as a foreigner (2026)
Becoming a private landlord in Germany as a foreigner
There is no nationality restriction: EU and non-EU citizens alike may own and let property in Germany, resident or not.
It is still taxed in Germany: as a non-resident you are subject to limited tax liability (§ 49 EStG), file the Anlage V and pay 14–45 % income tax. Your duties as a landlord are identical to those of a German one.
§ 49 Abs. 1 Nr. 6 EStGIn 60 seconds
There is no nationality or residence requirement for owning and letting property. You do not need a German address.
German rental income is always taxed in Germany: the property's location governs, regardless of where you live.
As a non-resident you generally get no Grundfreibetrag (basic allowance): tax starts at the first euro, unless you elect under § 1 Abs. 3 EStG.
Depending on the double taxation treaty, your country of residence either exempts the German income or credits the German tax. You do not pay twice.
Letting residential space is exempt from VAT (§ 4 Nr. 12 UStG); you do not charge VAT on the rent.
An Energieausweis (energy certificate) is mandatory before letting (§ 80 GEG). A breach can be fined up to 15,000 euros (§ 108 GEG).
What the law says
Domestic income for the purposes of limited income tax liability includes income from renting and leasing, to the extent that the immovable property is situated in Germany.
Resident or not, what differs
| Point | Resident landlord | Non-resident landlord |
|---|---|---|
| Tax liability | unlimited (worldwide income) | limited, German rental income only (§ 49 EStG) |
| Form | Anlage V | Anlage V |
| Basic allowance | yes | no, unless you elect under § 1 Abs. 3 EStG |
| Double taxation | — | taxed in Germany; the country of residence exempts or credits |
| Landlord duties | energy certificate, deposit, ancillary costs, tenant registration confirmation | identical |
Your duties are the same as a German landlord's
Where you live changes nothing about your obligations under German tenancy law. These five apply regardless:
| Duty | What it requires | Basis |
|---|---|---|
| Energieausweis | show prospective tenants a valid energy certificate before letting | § 80 GEG |
| Deposit | hold the deposit (max. 3 months' base rent) separately and with interest | § 551 BGB |
| Service charge statement | issue it within 12 months of the end of the billing period | § 556 Abs. 3 BGB |
| Wohnungsgeberbestätigung | confirm the tenant's move-in for their registration | § 19 BMG |
| Rent increases / rent cap | observe the capping limit and the local comparable rent | § 558, § 556d BGB |
Letting from abroad: account and management
A German bank account is not mandatory, but it makes a great deal easier: above all holding the deposit separately under § 551 BGB and evidencing incoming payments. SEPA transfers from elsewhere in the EU work just as well.
Presence on the ground is the harder part. Handovers, viewings, tradespeople and the condition of the flat cannot be supervised from a distance. A property manager takes this on for a fee; otherwise you need a trusted person who records the condition at move-in and move-out in a way that can be followed, without it, a dispute over the deposit comes down to one word against another.
Common mistakes
German rental income is taxed in Germany regardless of where you live (§ 49 EStG).
Non-residents are taxed from the first euro unless they elect under § 1 Abs. 3 EStG.
It must exist before the listing goes up; the fine reaches 15,000 euros (§ 108 GEG).
It must be held separately from your own assets and bear interest (§ 551 BGB).
After it you can no longer claim a balancing payment (§ 556 Abs. 3 BGB).
What to do next
Sort out tax registration: the competent Finanzamt is the one where the property is located.
Obtain the energy certificate before you advertise (§ 80 GEG).
Set up a German account or a SEPA arrangement for rent and deposit, and hold the deposit separately.
From abroad: appoint a property manager or a trusted person on site for handovers and condition records.
File the Anlage V by 31 July of the following year, or instruct a tax adviser.
Frequently asked questions
Can a foreigner own and rent out property in Germany?
Yes. Germany places no nationality or residency restriction on owning real estate or letting it out. EU and non-EU citizens, whether they live in Germany or abroad, can be private landlords on the same terms as Germans. You do not need German citizenship or residence. You do, however, pay German tax on the rental income.
Do I pay German tax on rental income if I live abroad?
Yes. Rental income from German property is always taxed in Germany. As a non-resident you are beschränkt steuerpflichtig (subject to limited tax liability) under § 49 Abs. 1 Nr. 6 EStG: you file a German tax return with the Anlage V (rental income schedule) and pay Einkommensteuer on a progressive scale (roughly 14 % to 45 %) on the surplus after Werbungskosten. Double-taxation treaties follow the situs principle, giving Germany the right to tax German real estate.
Do non-resident landlords get the Grundfreibetrag?
Generally no. Under § 50 EStG, landlords with only beschränkte Steuerpflicht do not receive the Grundfreibetrag (basic tax-free allowance), so German rental income is taxed from the first euro. EU/EEA citizens whose income is at least 90 % German-sourced can elect unbeschränkte Steuerpflicht under § 1 Abs. 3 EStG and then claim the allowance.
Do I have to charge VAT (Umsatzsteuer) on residential rent?
No. Letting residential property is exempt from Umsatzsteuer (VAT) under § 4 Nr. 12 UStG. You neither add VAT to the rent nor can you reclaim the Vorsteuer (input VAT) on your costs such as renovations. This applies regardless of whether you are resident in Germany or abroad.
What duties does a landlord have in Germany?
The same for foreign and German landlords: provide an Energieausweis (energy certificate) before letting (§ 80 GEG), hold the Kaution (deposit, max three cold rents) separately and interest-bearing (§ 551 BGB), issue the Nebenkostenabrechnung (operating-cost statement) within 12 months (§ 556 Abs. 3 BGB), supply the Wohnungsgeberbestätigung for the tenant's Anmeldung (§ 19 BMG), and observe the Mietpreisbremse and the Kappungsgrenze on rent increases (§ 558 BGB).
Can I manage a German rental from abroad?
Yes. Many non-resident landlords appoint a Hausverwaltung (property manager) to handle day-to-day matters and a Steuerberater (tax adviser) for the Anlage V. A German bank account makes rent collection and tax payments easier, and you remain personally liable for your landlord duties even when a manager acts for you.
This page gives general information as at the date shown. It does not replace legal advice on an individual case.