Grundfreibetrag
The German tax-free allowance — not granted on a standard non-resident return.
The Grundfreibetrag is the slice of taxable income on which German income tax is zero: €12,096 for 2025 and €12,348 for 2026 under §32a EStG. Residents get it automatically. A non-resident filing under limited tax liability does not: §50 Abs. 1 EStG adds the Grundfreibetrag to the taxable income before the tariff is applied, so the German tax starts from the first euro of rental profit. This is why a modest flat with €3,000 of profit can still produce a German tax bill, and why a filing is worth preparing even when the amounts feel small. The allowance can come back only through the §1 Abs. 3 EStG option, which requires almost all of your worldwide income to be German-taxable, or non-German income below the allowance, certified by your home tax authority.
Last reviewed: by Yann Lephay.