At around 11pm on Friday, the men used axes to smash down the door of the 49-year-old's family home in the town of Hamm-Uentrop in North Rhine-Westphalia, the Bild newspaper reported.
The men sprayed pepper spray in his face, and demanded cash and valuables from the nine people in the house at the time.
They then tied up the Hindu family, and stole valuable religious objects from the neighbouring temple, which they then vandalized.
In all, the criminals reportedly spent over two hours in the house and the temple before making their escape. The priest's 44-year-old wife managed to free herself and call the police around 20 minutes later.
The cost of the damage was estimated at close to €100,000.
Paskarakurukkal moved to Germany from Sri Lanka in 1983. He founded his first temple in a home for asylum seekers, before moving it into a disused bowling alley.
The holy building vandalized on Friday was completed in 2002, and is now the biggest Tamil temple in Europe.