Sell business property at a profit, and you don't have to share the proceeds with the tax office — you can carry the gain into your next investment. § 6b EStG (German Income Tax Act) allows hidden reserves from sales of land and buildings to be rolled over to new assets, or parked in a reserve for up to six years. In an era of active portfolio rebalancing, this provision is the key instrument for tax-neutral reallocations.
What qualifies
Eligible for rollover are gains from the sale of land, standing crops (for agricultural and forestry businesses), buildings and inland waterway vessels held as fixed assets. The key condition: the asset sold must have formed part of the fixed assets of a domestic permanent establishment for at least six uninterrupted years (§ 6b Abs. 4 EStG). The gain can be applied to acquisitions made in the year of sale or the preceding year by direct transfer; alternatively, a reserve is created.
How the deadlines work
- Four years to reinvest in land or buildings;
- six years, where the reinvestment is in newly constructed buildings and construction begins before the end of the fourth year;
- if the deadline expires without reinvestment, the reserve is released and added back to taxable profit — plus a 6 percent surcharge for each full year of its existence (§ 6b Abs. 7 EStG). The reserve is not a parking space — it is a timetable.
Partnerships and sole proprietors can also roll over gains from the sale of shares in corporations of up to 2 million euros under § 6b Abs. 10 EStG — into new shares, movable assets or buildings. The former limit of 500,000 euros has been raised substantially; many older guides are out of date on this point.
Strategic use cases
- Portfolio rotation: Sell an appreciated business property and reinvest in logistics or production space — without the erosion of capital that immediate taxation would cause.
- Site relocation: The hidden reserves in the old site finance the new build; the six-year window for new construction buys you building time.
- Succession and restructuring: Ahead of a handover, real estate can be moved tax-neutrally out of the operating business into a holding property company — a building block that is regularly overlooked in succession processes.
- Combining with your real estate strategy: The target assets are subject to the standard depreciation rules — including the declining-balance depreciation for residential buildings, which we examine in our article Real Estate as a Capital Investment .
The pitfalls
- Six-year prior holding period: Sell too early and you forfeit the benefit entirely.
- Rollovers are permitted only to fixed assets of domestic permanent establishments; for EU permanent establishments, § 6b Abs. 2a EStG merely allows the tax payment to be spread over time.
- Partner-specific treatment: In partnerships, the reserve must be maintained on a per-partner basis — this opens structuring opportunities (transfers between businesses of the same taxpayer) but demands meticulous bookkeeping.
- Buildings only to buildings: Gains on land can be rolled over more flexibly than gains on buildings — the reinvestment matrix in § 6b Abs. 1 needs to be reviewed before the sale, not after.
Frequently Asked Questions
How long can taxation be deferred?
Up to four years, or up to six years if reinvesting in newly constructed buildings. Where the rollover is completed within the deadline, the gain is permanently shifted to the new asset — tax falls due only when that asset is itself later sold.
What does releasing the reserve without reinvestment cost?
Back taxation plus a 6 percent surcharge for each full year the reserve existed — after four years, that means a 24 percent premium on the reserve amount.
Does § 6b also apply to GmbHs?
Yes — without restriction for land and buildings. Only the rollover of gains from share disposals under Abs. 10 is reserved for partnerships and sole proprietors; corporations use § 8b KStG (German Corporation Tax Act) instead.
More than 20 years advising entrepreneurs, investors and family businesses. Reserved tax services are provided by our partner tax firm, TABAK Steuerberatung.
Firm Profile →Plan the rollover before you sell.
We review holding periods, the reinvestment matrix and deadlines — and structure the § 6b reserve into your investment planning.