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The Spousal Swing or Ehegattenschaukel: How the Real Estate Tax Trick Works in Germany?

In this article, you will find essential information about the "Spousal Swing" (Ehegattenschaukel in German), a tax-saving strategy where spouses sell rented properties to each other. This approach aims to increase depreciation potential and reduce tax liabilities.
Dr. Chris Mulder

Dr. Chris is a former Senior Economist and Manager at the IMF and The World Bank. He is a Hypofriend Co-founder.

Published on Jul 5, 2024 Published on Jul 5, 2024 . Updated 12 days ago

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Dr. Chris is a former Senior Economist and Manager at the IMF and The World Bank. He is a Hypofriend Co-founder.

The “Spousal Swing” or Ehegattenschaukel in German, is a tax-saving model where spouses sell rented properties to each other to increase depreciation potential and save on taxes. This process leverages property value appreciation and the lack of certain taxes between spouses.

Key points in short

  • __Spousal Swing Concept__: Spouses sell rented properties to each other every 10 years to avoid speculation tax and utilize the property’s increased value for higher depreciation.
  • __Tax Benefits__: No speculation tax after 10 years and no property transfer tax between spouses. The higher depreciation reduces rental income, leading to lower overall income tax for jointly assessed couples.
  • __Eligibility__: This model works for all first-degree relatives, not just spouses.