Germany’s Crypto Holding Period Is Wobbling: What to Check Before December 31

The coalition agreement does not protect the one-year holding period for crypto assets. Since September 25, 2026 that is no longer a supposition but the statement of a Union member of parliament himself: replying to a citizen’s question on abgeordnetenwatch.de, CDU Bundestag member Lars Ehm wrote that the agreement contains “no concrete undertaking on the unchanged continuation of the one-year holding period for crypto assets”. He went on: a commitment to abolish it can “no more be derived from it than a binding promise of its unchanged continuation”. Anyone who has assumed until now that the coalition had written tax exemption after one year into stone was relying on something that was never there.

In the short term that changes nothing about the legal position for you as an investor, but a great deal about the basis on which you plan. The one-year period still applies, and it applies for the whole of 2026 as well. What matters is the cutoff date set out in the draft bill from the Federal Ministry of Finance: anyone buying after December 31, 2026 is to fall under the new system. That leaves less than four months in which you can still place purchases under the old rule. This article sorts out what is documented, what remains open, and which three things can actually be checked right now.

What Lars Ehm replied, and why it is more than a quibble over words

The answer comes from the public question portal abgeordnetenwatch.de, where citizens can write to members of parliament directly and where the replies remain permanently visible. Ehm begins by setting out the current legal position correctly: in private assets, Bitcoin and other crypto assets can fall under other economic goods pursuant to section 23 of the German Income Tax Act, and where they are held for more than a year, the gain on disposal is in principle tax-free.

The politically relevant part comes afterwards; the answer was first documented by Blocktrainer on September 25, 2026. Ehm declines to promise how he will vote, on the grounds that he will base his conduct on the actual bill, whose final wording has yet to be settled. For a member of parliament that is a customary position and a constitutionally clean one, because the free mandate rules out binding oneself in advance. The position does, however, have a side effect: it strips the value from the argument that has calmed this debate for months.

Up to now the line of defence ran like this: abolishing the holding period is not in the coalition agreement, so it will not happen. The first half of that still holds. The second does not follow from it, and that is precisely what a member of the parliamentary group that negotiated the agreement is now saying. A coalition agreement is not a law in any case and cannot be enforced in court; it is a statement of political intent. What is not in it is therefore neither prohibited nor guaranteed.

The holding period under section 23 of the Income Tax Act: what remains unchanged in 2026

For the analysis to hold, here is the rule being fought over. The one-year holding period is the span between the acquisition and the disposal of an economic good held as a private asset: where more than a year lies between the two, the gain is free of income tax under section 23(1) sentence 1 no. 2 of the Income Tax Act. Where it is less, the gain counts as other income and is taxed at your personal rate.

Three points on this regularly get lost in the excitement:

• The exemption limit. Gains from private disposal transactions within the one-year period remain tax-free as long as the total gain from all such transactions in the calendar year stays below 1,000 euros. An exemption limit is not an allowance: once it is breached, the entire amount is taxable, not merely the excess.
• A swap is a disposal. Anyone swapping Bitcoin for Ether or for a stablecoin is disposing of an asset for tax purposes. The period for the asset received starts afresh on the day of the swap.
• The period runs per acquisition. It is not your holding that is a year old, but each individual tranche. How that is added up is set out below.

These three points are the foundation everything else rests on. The remainder of this article assumes them.

The draft bill: a flat 25 percent withholding tax instead of your personal rate

What the Federal Ministry of Finance is preparing under minister Lars Klingbeil is not a small correction to the holding period but a change of system. Under the draft bill that has become known, gains on crypto assets are in future to be subject to a uniform withholding tax of 25 percent, plus the solidarity surcharge and, where applicable, church tax, and regardless of how long the assets were held. For tax purposes crypto assets would thereby move to where shares and fund units already sit today.

A draft bill, in procedural terms, describes the earliest stage: a ministry’s working draft, still ahead of agreement within the federal government, ahead of a cabinet decision, and a long way ahead of a first reading in the Bundestag. It is not applicable law and never has been.

Two figures from the draft are worth knowing all the same, because they set out the timetable. The new rules are to take effect from the 2027 assessment period. Automatic tax deduction by crypto service providers, the equivalent of the capital gains tax your bank already withholds, is only to arrive from 2028. In between lies a year in which the tax applies but is still settled through your tax return.

Whether the switch works out more expensive or cheaper for you depends on your personal tax rate and on your investment horizon. Anyone trading on short horizons with a high marginal rate may even come out ahead with a flat 25 percent. Anyone holding for years, by contrast, loses a complete exemption. The two calculations lead to markedly different results depending on how long you hold.

Cutoff date December 31, 2026: how the planned grandfathering works

The draft provides for grandfathering, and it is the reason this article can contain a recommendation at all. The new rules are to apply only to crypto assets acquired after December 31, 2026. For everything acquired before that, the existing system with the one-year period is to continue unchanged, even if you only sell years later.

From that follows an uncomfortably simple calculation. Fewer than a hundred days separate today from the cutoff date. Every tranche you buy until then would fall permanently under the old rule according to the draft. Every tranche after it would not. That is the only lever a retail investor has in this matter at all, and it closes at the turn of the year.

Two warnings belong right beside it. First, the grandfathering sits in a draft and not in the federal law gazette. It can fall in the legislative process, be postponed, or be cut differently. Second, a tax deadline is not a reason to buy. Anyone pushing money into a volatile market solely because of a possible change in tax law is trading a manageable tax risk for a considerably larger price risk. According to CoinGecko, the Bitcoin price stood at around $84,085 on September 25, 2026, a good 33 percent below its all-time high from October 2025. Nobody knows how that will develop by the end of the year.

We have already worked through the cutoff date and its details when the draft became known: crypto holding period: the December 31, 2026 cutoff date in the draft.

FIFO and the acquisition date: where grandfathering fails in practice

Grandfathering only helps those who can demonstrate that they fall under it. And this is where things turn awkward for many portfolios, because the allocation hangs on the individual acquisition rather than on the holding as a whole.

FIFO stands for first in, first out and describes the consumption sequence the tax authorities apply to fungible economic goods held in the same wallet: when you sell, the units acquired first count as the first to be disposed of. For the holding period that is usually favourable, because the oldest pieces leave first. For grandfathering tied to a cutoff date it is the decisive mechanism, because it determines which of your tranches is touched at all when you sell.

Three sources of error follow from this. All of them can still be fixed today and only with difficulty after the turn of the year:

1. Missing proof of acquisition. Without a purchase record showing date, quantity and value, the moment of acquisition cannot be demonstrated. Where exchange accounts have been closed, or where providers have left the market, an export can no longer be obtained after the fact.
2. Transfers between wallets. Anyone moving holdings back and forth without documenting the transfer produces gaps that tax software later reads as fresh purchases. On paper, the acquisition date then shifts later.
3. Mixed holdings. Where old and new tranches sit in the same wallet, the consumption sequence decides what leaves when you sell. Anyone wanting to preserve grandfathered legacy holdings has to know which units those are.

In practice that means the work worth doing now is documentation rather than buying. A clean transaction history with unbroken acquisition dates is the basis on which grandfathering can be claimed at all. Which tools merge the histories of several exchanges and wallets and produce FIFO evidence is set out in our comparison of crypto tax tools and portfolio trackers. What the tax office wants to see in an audit is essentially the same thing: acquisition date, quantity, value, and a traceable path from purchase to sale.

Savings plans, staking and swaps: where the cutoff date hurts most

Three constellations deserve attention of their own, because the cutoff date works differently there than it does for a single purchase.

Savings plans. A savings plan creates a fresh acquisition every month, with its own date and its own period. If it runs across the turn of the year, the draft splits it into two groups: instalments up to and including December 2026 with grandfathering, instalments from January 2027 in the new system. Both sit in the same wallet and look identical in the portfolio. Without clean documentation for each instalment, that separation can no longer be shown later.

Staking and lending. Two questions come together here that are readily conflated. The ongoing rewards are already taxable today at the moment they accrue, as other income, independently of any holding period. Separate from that stands the question of when the units received count as acquired. Where that moment falls after the cutoff date, under the draft they would be new holdings. A staking position running across the turn of the year therefore produces units in the new regime on a rolling basis, even though the capital committed is old.

Swaps. Every swap is a disposal and an acquisition at once. Anyone swapping legacy holdings for another coin in January 2027 sells tax-free, provided the one-year period has run, and at the same moment buys new holdings that would fall permanently under the withholding tax. Portfolio reallocations that are due anyway would therefore be cheaper before the cutoff date than after it. Whether a reallocation makes economic sense is a separate matter.

From draft bill to the law gazette: what the process still allows

How likely the reform is to arrive is an assessment and not a fact. Only the procedural stage is verifiable, and that can be described without speculation.

A draft bill passes through interdepartmental coordination, consultation with the federal states and associations, a cabinet decision, three readings in the Bundestag and the Bundesrat. At each of these stations the content can change, and tax laws are regularly rewritten right into the finance committee. The December 31, 2026 cutoff date is therefore the element of the whole draft carrying the greatest uncertainty: the later the process runs, the harder a retroactive cutoff date becomes to sustain.

What can be derived from Lars Ehm’s statement is limited, and no more should be read into it. It shows that at least one Union member of parliament does not read the coalition agreement as a barrier and reserves his decision for the actual draft. It does not show how the parliamentary group as a whole will vote, and it is not the announcement of a reversal. Anyone already reading the end of the holding period into it is overstretching a single answer on a citizens’ portal.

The opposing position has nevertheless grown weaker. The Union had declared in the spring that it saw no reason to change crypto taxation, a position that counted as solid until this answer. Between “we see no reason” and “I am not committing myself” lies a difference that investors should factor in.

Three responses that pay off, and three that do not

From everything said so far follows a manageable list. What makes sense is whatever stays right even if the reform never arrives.

What is worth doing: export the complete transaction history of every exchange and wallet you use and secure it outside the platform while the accounts are still open. Document the acquisition date for each tranche, transfers between your own wallets included. And pull reallocations that are planned anyway forward, ahead of the turn of the year, instead of pushing them into the new one.

What is not worth doing: putting additional capital into the market purely because of a draft. Selling legacy holdings in a panic before the cutoff date, when those are precisely the ones meant to keep the protection. And betting on a tax optimisation that only works if the draft becomes law exactly as it looks today.

Anyone having to assemble their history should also check whether the venues they use supply complete tax reports for the German market at all. Where such a report is missing, only the raw data export remains, and that can no longer be obtained once an account has been closed.

The crypto holding period and the coalition agreement: what to take away

1. Stop treating the coalition agreement as a shield. A Union member of parliament has stated publicly that it writes down neither the abolition nor the continuation of the holding period. That does not change the law in force, but it does change your planning assumption. First get a complete overview of your own acquisition dates, for instance with a tool from our comparison of crypto tax tools.
2. Secure the evidence before the cutoff date arrives. The planned grandfathering for purchases up to December 31, 2026 only helps if you can evidence the acquisition date of each tranche. Export the histories of all your accounts, including the rarely used ones, and check while you are at it whether your exchange provides a German tax report; our exchange comparison gives the overview.
3. Separate the tax deadline from the investment decision. A cutoff date is a reason to put your records in order and to bring forward reallocations that were planned anyway. It is not a reason to put additional capital into a volatile market. If you buy regularly in any case, check instead that your instalments are running with clean documentation; the providers for that are listed in our comparison of Bitcoin savings plans.

This article is no substitute for tax advice. With larger holdings, with staking rewards, or with an incomplete history, a visit to a tax adviser is the cheaper option.

(As of September 25, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)