German rental income for residents of Switzerland
Key facts
- Treaty
- Germany–Switzerland DBA of 11 Aug 1971, last amended by the 2023 Protocol (in force 27 Nov 2025)
- Who taxes the rent
- Germany — Art. 6; wealth under Art. 22
- Swiss method
- Exemption with progression — Art. 24(2) Nr. 1, no credit
- Swiss treatment
- Excluded from taxable income and wealth (Art. 6 DBG), included for the rate
- Swiss return
- Declare the flat in the property list; foreign share shown separately (Zürich: Ziffer 26.2 and 36.2)
- Debts and interest
- Allocated proportionally to gross assets, wherever the loan sits
- German losses
- Only rate-determining in Switzerland; carried forward in Germany
File the German return first
Rent from a flat in Germany is German-source income under §49 Abs. 1 Nr. 6 EStG, whatever your nationality. As a resident of Switzerland you file the non-resident return: Hauptvordruck ESt 1 C with one Anlage V per property, through ELSTER, at the Finanzamt where the property is located.
- No Grundfreibetrag: §50 Abs. 1 EStG taxes the profit from the first euro.
- Deduct German Werbungskosten, mortgage interest and AfA under German rules.
- Deadline for a self-filed 2025 return: 31 July 2026. If you missed it, file now — the late-filing surcharge only becomes automatic 14 months after year-end, at the end of February 2027.
- Treatment as a German resident under §1 Abs. 3 EStG is open if at least 90 % of your worldwide income is German-taxable, or if your non-German income stays below the Grundfreibetrag (reduced for some countries of residence). With a salary at home, neither test is usually met — but a retiree with little foreign income may qualify.
- Living outside the EU/EEA, the Finanzamt may ask you to name an Empfangsbevollmächtigter in Germany. Letters posted abroad count as delivered one month after posting.
Exempt, but not invisible
Under Article 24(2) Nr. 1 of the treaty, Switzerland exempts income and wealth that Germany may tax, but may apply the rate that would apply if they were included. The federal law says the same: unlimited liability does not extend to property abroad (Art. 6 DBG), and the rate is the one for total income (Art. 7 DBG). In practice the flat is declared in the Swiss return with its income and value; the tax office then performs the international allocation (Steuerausscheidung). The German net income used for the rate is computed under Swiss rules — maintenance, insurance and management costs — not taken from Anlage V, and Swiss rules do not deduct building depreciation like German AfA.
Debt allocation: the part people miss
Cantonal practice, confirmed by the Federal Supreme Court, allocates private debts and debt interest proportionally to the location of all gross assets, not to the country where the loan was taken. If your German flat is debt-free but you have a Swiss mortgage, part of that mortgage and its interest is moved abroad: Swiss deductible interest falls and Swiss taxable wealth rises. Conversely, a German loan larger than the flat's share is partly pulled back to Switzerland. Foreign excess costs or interest are not deducted from Swiss taxable income; they only affect the rate. Swiss rules on the deductibility of private debt interest are also being reformed together with the imputed rental value, so check which year's rules apply.
Example: the same flat, taxed in Germany and Switzerland
Illustrative only. Every country page uses the same German flat so you can compare. German side: tax year 2025, non-resident return, no other German income.
| Rent received incl. operating-cost advances | €12,000 |
|---|---|
| Running costs | − €2,000 |
| Mortgage interest | − €3,000 |
| AfA, 2 % of €100,000 building basis | − €2,000 |
| German rental profit | €5,000 |
| German income tax (§50 EStG, no Grundfreibetrag)Soli: 0 | €933 |
Zürich resident. Gross assets: Swiss home CHF 1,000,000, securities CHF 200,000, German flat CHF 300,000 (20 % of assets). Total debts CHF 700,000, of which CHF 100,000 is the German loan; total interest CHF 12,000.
| Share of assets abroad | 20 % |
|---|---|
| Debts allocated to the German flatnot the actual CHF 100,000 loan | CHF 140,000 |
| Interest allocated abroad | CHF 2,400 |
| Swiss deductible interest | CHF 9,600 |
| German net income under Swiss rulesbut sets the rate | exempt |
| German taxexemption method | not credited |
The German tax is the tax you pay on the flat. In Switzerland the flat costs you through the rate and through the reallocated debt, not through a direct tax on the rent.
Mistakes specific to Swiss residents
Using the Anlage V figure in the Swiss return
The Swiss rate-determining income is computed under Swiss rules, without German AfA and with interest allocated by assets.
Expecting to offset a German loss
A German rental loss never reduces Swiss taxable income; it only lowers the rate. In Germany it is carried forward under §10d EStG if you file the loss-year return.
Assuming the address abroad is enough
Switzerland is outside the EU/EEA, so the Finanzamt may ask you to name a receiving agent in Germany (§123 AO). Answer quickly: letters to Switzerland count as delivered one month after posting.
When this page is not for you
- Cross-border commuters (Grenzgänger) and anyone who keeps a home in Germany.
- People who left Germany recently after long German residence: special treaty and extended limited-liability rules can apply for several years.
- Property held through a company, lump-sum taxation, and the year of sale.
In these cases, or when amounts are large, ask a Steuerberater and a tax adviser in your country of residence.
Common questions
How is German rental income taxed for Swiss residents?
Germany taxes the rental profit through the standard non-resident return (ESt 1 C with Anlage V), from the first euro. Switzerland exempts the German rent and the flat's value from income and wealth tax, but includes them to set your rate. Debts and debt interest are reallocated across all your assets, so a German flat can shift part of your Swiss mortgage abroad. German tax is never credited in Switzerland: it is the exemption method.
Is German tax credited against Swiss tax?
No. For rental income from German property, the treaty uses exemption with progression. Switzerland does not tax the rent, so there is nothing to credit.
Which exchange rate applies in the Swiss return?
Cantons use the ESTV Kursliste. Zürich, for example, values assets at the year-end rate; check your canton's instructions for income.
Last reviewed: by Yann Lephay.