Crypto Holding Period and Grandfathering: Why December 31, 2026 Becomes the Cut-Off in Germany's Draft Bill

If you bought your crypto assets before December 31, 2026, or buy them by that date, then on the current state of the draft nothing changes for them: hold for a year, then sell tax-free. Only crypto assets acquired or received after December 31, 2026 would fall under the new treatment as investment income. That is what a draft bill from Germany's Federal Ministry of Finance dated mid-August says, first reported by WELT on September 8, 2026 and reproduced with an explicit source citation by the specialist outlet Blocktrainer. None of it has been passed into law, and those two halves together describe your position: a dated cut-off in a paper that still has the whole legislative route ahead of it.

This article sets out what the draft means for an ongoing savings plan, for staggered purchases and for coins from staking and lending, which records you should secure now, and why our own report from yesterday appears at first glance to say the opposite.

Crypto Holding Period, Grandfathering and Cut-Off Date: German Tax Law in 2026

As long as no law is in force, today's rules continue to apply unchanged. Gains from the sale of cryptocurrencies held privately are taxable under Section 23 of the German Income Tax Act (EStG) if less than a year lies between acquisition and sale. Hold for more than a year and you sell tax-free. This one-year holding period applies to Bitcoin just as it does to any other coin held privately.

For crypto investors that means, quite practically: the draft bill changes nothing about your 2026 tax return. Crypto gains you realise this year within the one-year window are still taxed at your personal income tax rate, and sales after the period has run remain tax-free. The tax change under discussion here would affect acquisitions from 2027 at the earliest.

The difference between short-term speculation and long-term holding matters, because today it decides the tax bill and the draft would level it out. That is exactly what turns the cut-off into an arithmetic problem for Bitcoin holders with large crypto positions: the value of the old rule rises with every year a position sits untouched anyway.

What the German Draft Bill Actually Lays Down on the Crypto Holding Period

A Referentenentwurf, or ministerial draft bill, is the working version of a law written by a specialist unit inside the responsible ministry before the cabinet, the Bundestag and the Bundesrat are involved at all. It is not law in force, but the first place where a political intention acquires sections and dates.

According to the WELT report, this draft contains three provisions that were not public before. First, gains from the sale of crypto assets are to be taxable in future regardless of the holding period and to fall in principle under the flat-rate withholding tax as investment income. Second, the law is to enter into force on January 1, 2027. Third, the new provisions are to cover only crypto assets acquired or received after December 31, 2026.

The reasoning the draft supplies, per the report, is remarkably sober: because of their speculative use, their high liquidity and their lack of wear, crypto assets resemble classic capital investments more than ordinary economic goods. That removes the doctrinal basis of today's treatment. Until now, Bitcoin and other coins held privately count as "other economic goods", the sale of which is a private disposal transaction under Section 23 of the Income Tax Act.

Why December 31, 2026 Is the Decisive Cut-Off Date

The one-year holding period, often called the one-year rule or speculation period, is the span between acquisition and sale after which a gain on privately held assets remains tax-free. That period hangs on the acquisition date of the individual coins, not on your sale date and not on the calendar year.

That is precisely why the cut-off in the draft acts like a dividing line straight through your portfolio. A Bitcoin you bought in March 2025 would be a legacy holding. A Bitcoin you buy on December 15, 2026 would also be a legacy holding, even though its one-year period does not run out until December 2027. A purchase on January 3, 2027 would be a new holding and therefore taxable under the draft, however long you leave it sitting.

For you that means: what counts is the day you buy, not the day the period expires. Anyone who was planning to add to their position in the first quarter of 2027 anyway now has an argument, on the current draft, for bringing that purchase forward. Anyone deciding a wealth question of that size should nonetheless keep two things apart: the cut-off sits in a draft, whereas your purchase decision is real and costs money.

A second point is often overlooked in the debate. The exemption limit of 1,000 euros for private disposal transactions under Section 23 EStG is a threshold, not an allowance: exceed it by one euro and you tax the entire gain, not just the excess. That threshold hangs on today's system. If crypto assets move into investment income, the saver's lump-sum allowance applies there instead, which covers all investment income together and which many investors already use up on interest and dividends.

Is There Grandfathering for Your Existing Holdings in Germany?

Grandfathering means, in tax law, that a new rule applies only to future circumstances and that positions already acquired are treated under the old law. On the reporting so far, the ministerial draft provides for exactly that: the federal government would forgo applying the change retroactively to existing holdings.

That is the most important substantive news in this draft, and it is the all-clear for everyone who has been holding for years. Until September 8, 2026 it was open whether legacy holdings would be protected at all. The specialist portal extraETF had explicitly called the question unresolved in July and named grandfathering "the most important question for many investors". The draft answers it for the first time with a date.

Legally the route is an obvious one. Protection of legitimate expectations is a constitutional principle that permits burdensome retroactivity only within narrow limits, and the legislator has already applied it in comparable reforms. When the flat-rate withholding tax was introduced in 2009, legacy holdings of shares and funds stayed under the old speculation period. The parallel is no guarantee, but it explains why a draft with a cut-off is more likely than a reform that reaches back over everything.

When Would the Crypto Holding Period End, and When Would Withholding Start?

The draft separates two dates that regularly get conflated in public debate. The law itself is to enter into force on January 1, 2027. The actual withholding at source, where crypto service providers deduct the tax directly and pass it to the tax office, is not to begin until January 2028 according to the report.

That transition period is not generosity but a technical concession. An exchange can only withhold correctly if it knows when and at what price you acquired your coins. For holdings deposited from your own wallet or from another platform, it does not know. The draft therefore provides that service providers may partly rely on your own statements of acquisition date and acquisition cost.

And if those details cannot be established? Then a flat assessment base is to apply: withholding on 50 percent of the proceeds from the sale. What is meant is not a tax rate of 50 percent, but the assumption that half your sale proceeds were gain. Sell a position with a small price gain and produce no records, and you would pay considerably too much tax and have to claim the money back through your tax return. That is the real reason your acquisition records are worth money from now on.

What the Cut-Off Means for Your Running Bitcoin Savings Plan

A savings plan does not buy once but every month, and each of those executions is a separate acquisition with its own date. If your savings plan runs across the 2026/2027 turn of the year, on the current draft it splits into two groups: every instalment up to and including December 2026 would be a legacy holding with a holding period, every instalment from January 2027 a new holding under the flat-rate withholding tax.

In practice that mainly means bookkeeping. On a sale, crypto assets in the same wallet are usually treated on the FIFO principle, under which the coins bought first count as sold first. When two tax regimes sit side by side, the allocation decides whether a sale is tax-free or subject to the withholding tax. We worked through how holding period, FIFO and the exemption limit interact with monthly purchases in detail in our guide to the Bitcoin savings plan and tax.

A clean record of your purchases is therefore no longer just diligence for the tax return, but the proof of which pot a position belongs in. Anyone who would rather not keep that in a spreadsheet will find programs in our comparison of crypto tax tools and portfolio trackers that pull acquisition data from the exchanges automatically and allocate FIFO sales correctly.

Staking, Lending and Airdrops: What Arrives Counts From the Cut-Off

On the reporting, the draft covers more than purchases. Income from classic lending, that is, lending coins out at interest, and from passive staking, where you pledge coins to secure a network and receive new units in return, is to be taxed as investment income in future. A transitional rule tied to the same cut-off is evidently envisaged for that as well: it covers crypto assets received after December 31, 2026.

The difference from a purchase lies in the word "received". A staking reward has no purchase date that you choose yourself; what counts is the day the units land within your power of disposal. Anyone who leaves their rewards sitting in the contract for months and only claims them later may thereby push the receipt beyond the cut-off. Whether that reading holds depends on the final version of the law and on the question of when power of disposal arises for tax purposes. For a decision on larger amounts, that is a case for a tax adviser, not for a rule of thumb.

Which Crypto Assets the Draft Expressly Excludes

The new category the draft is built around is called "exchange crypto assets" in the report. Not every digital asset falls under it. Excluded are to be, among others, non-fungible tokens, that is, non-interchangeable tokens representing a single digital object, plus security tokens, which digitally represent a securitised right such as a bond or a share, as well as other crypto assets intended to convey a real-world value. Certain stablecoins are also not to fall into the new category.

This delimitation is more than a footnote, because it helps decide which part of your portfolio would be affected at all. At the same time it is the point at which a draft, in experience, changes most in the further procedure: definitions that include or exclude an entire asset class attract the most comments during consultation.

Why Our Report From Yesterday Says Something Different, and Both Are True

On September 7, 2026 we reported that the Income Tax Reform Act 2027, which the federal cabinet waved through on September 2, leaves Section 23 EStG untouched and that the crypto holding period therefore stays for now. That was correct and remains so. A cabinet decision concerns precisely the law that is on the table, and that law said nothing about the holding period.

The ministerial draft at issue here is a different paper from a different procedural stage. According to the report it is in what is known as early coordination, that is, in the early alignment between the Federal Chancellery and the ministries involved, and it was not the subject of the cabinet decision on September 2. Two statements that appear to contradict each other therefore describe two different processes.

This double track is typical of crypto taxation in Germany and the reason why headlines on the subject so often stand against one another. The political intention has been documented since the government draft of the 2027 federal budget, which Finance Minister Lars Klingbeil explained himself at the federal press conference in July 2026. The route there runs through several legislative projects in parallel, and only one of them carries the crypto rules at any given moment.

A simple sequence helps in placing it. At the start stood the budget draft with the announced crypto tax reform. Out of that comes a ministerial draft inside the ministry, as now documented for mid-August 2026. Out of that, after inter-ministerial coordination, comes a government bill adopted by the cabinet, and only that goes to the Bundestag and Bundesrat as a bill. Each of those stages can still shift deadlines, definitions and the grandfathering.

Anyone wanting to gauge the consequences for their own crypto gains should therefore not read every headline as a decision, but pay attention to which stage a report is describing. We are following this procedure further in our crypto taxation cluster and recording the dates there.

Will There Be a Crypto Tax in Germany From 2027?

A crypto tax as a levy of its own does not exist and is not to exist under the draft either. What would change is the classification: away from private disposal transactions under Section 23 EStG, towards investment income with flat-rate withholding tax. Gains from crypto are already taxable today if you sell within a year and exceed the exemption limit.

For the question of whether the new rules from 2027 affect you at all, only one thing counts: the acquisition date of your coins. If they do affect you, the effect would cut both ways. The flat-rate withholding tax with its uniform rate can be cheaper than the personal income tax rate that a sale within the one-year window triggers today. The tax exemption after one year, which legacy holdings would keep, beats both.

What You Should Document by December 31, 2026

Whether or not the draft becomes law, one thing gains value in every scenario: a complete record of when you acquired what and at what price. If the cut-off becomes law, that date decides the pot. If it does not, you need the same records for the holding period.

So secure the complete transaction histories of every exchange you use as a file on your own computer, still this year. Platforms do not reliably provide old data after a change of provider or an account closure, and for holdings in your own wallet there is no body keeping it for you in any case. Record the acquisition date, quantity, acquisition cost in euros and the origin for each position, and document every transfer between your own addresses so that a move does not later look like a sale.

How seriously the legislator takes this subject is shown by a second front: through the European reporting obligations, the tax authorities are receiving increasing amounts of data from the platforms anyway. Anyone who knows their own figures can explain discrepancies. Anyone who does not is dependent on whatever the exchange has reported.

Crypto Holding Period and the December 31, 2026 Cut-Off: What to Take Away

1. Check which of your positions fall before the cut-off. Pull the acquisition dates together from every exchange and wallet and mark everything bought before December 31, 2026. A tool from our comparison of crypto tax tools and portfolio trackers takes the collecting off your hands and allocates FIFO sales automatically.
2. Decide deliberately about planned purchases for next year. If you wanted to add to your position in 2027 anyway, then on the current draft the question of bringing the purchase forward is a tax question, not a speculative one. How staggered purchases can be implemented is set out in our comparison of Bitcoin savings plans.
3. Secure your records where you keep them. Download the complete transaction histories of your trading venues before accounts or providers change. Which platforms supply usable exports is shown by our crypto exchange comparison.

The draft is a working version, not a law. Until it is passed, a good deal can still change both on the abolition of the holding period and on grandfathering. What does not change is the value of clean acquisition data.

Sources for further reading: the report by the specialist outlet Blocktrainer on the ministerial draft of September 8, 2026, which reproduces the WELT report, and the assessment of the government draft of the 2027 federal budget at extraETF.

(As of September 8, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)