Germany's 2027 Budget Could End Crypto Tax-Free Holding Period

The German government has placed crypto taxation on its savings list for the 2027 federal budget. The move could end the tax exemption investors currently earn after a one-year holding period.

Under current rules, German residents who hold crypto assets for more than 12 months pay no capital gains tax on sale. That exemption has made Germany one of the more tax-friendly jurisdictions for long-term crypto holders in Europe.

The budget savings list, which identifies potential revenue measures, includes a plan to remove that exemption. If enacted, all crypto gains would be taxable regardless of holding period. That would align crypto with other investment assets like stocks and bonds, where gains are taxed at the investor's personal income tax rate.

The 2027 timeline means the change is not imminent. The savings list inclusion puts the proposal on the table for active consideration. Germany's coalition government has been under pressure to close budget gaps, and crypto taxation offers a new source of income.

For German retail investors, the change would remove a key incentive for long-term holding. Traders who accumulate Bitcoin or Ethereum for over a year would face tax on gains at rates that can reach 45%. That could shift behavior toward shorter holding periods or push some activity to offshore platforms.

The proposal also adds to a global trend of tightening crypto tax rules. Countries like India and the U.S. have already imposed specific crypto tax regimes. Germany's move, if passed, would remove one of the remaining tax advantages in Europe.

The budget is scheduled for parliamentary debate in 2026. No draft legislation has been published yet.