Depreciation (AfA) on a German rental property, and what it hands you back

2.0 per cent a year, for 50 years — Sec. 7 (4) EStG

Finished between 1 January 1925 and 31 December 2022. Almost every flat on the market, and the baseline for everything else here.

2.5 per cent a year, for 40 years — Sec. 7 (4) EStG

Finished before 1925. That is half a point more than for a building finished between 1925 and 2022.

3.0 per cent a year, for 33 years and four months — Sec. 7 (4) EStG

Finished after 31 December 2022. The fastest of the flat-rate routes, and it depends on the date alone.

5 per cent of what is left each year — Sec. 7 (5a) EStG

Residential, built by you or bought in the year it was finished, started or signed between 1 October 2023 and 30 September 2029. It pulls relief into the early years, and you may switch to the steady rate later.

An extra 5 per cent in each of the first four years — Sec. 7b EStG

On top of your normal rate. Permit after 31 December 2022 and before 1 October 2029, Efficiency House 40 with the sustainability seal, cost under 5,200 EUR per square metre with only 4,000 counted, and ten years of letting.

9 per cent for eight years, then 7 per cent for four — Sec. 7i EStG

Listed monuments, and Sec. 7h for redevelopment areas. It needs a certificate from the state authority and covers work agreed after your contract took effect.

100 divided by the years a surveyor certifies

Usually 3.0 to 4.0 per cent a year. Expert evidence that the real remaining life is shorter than the age group assumes — the one route open on an ordinary older flat.

Send the building year and the price and we come back with your rate.

The surveyor rule was scrapped on 1 December 2025

You may deduct faster if you prove the building has less life left than the law assumes. The demand for a specially appointed surveyor was withdrawn and nothing replaced it. Any sound expert method is allowed now (Federal Fiscal Court, 23 January 2024, IX R 14/23).

Such a report costs 789 to 1,482 EUR and can pay for itself inside a year

Seven providers checked on 20 August 2026: 789 to 950 EUR for a desk report, 1,018 to 1,482 EUR with an inspection. Going from 2 to 4 per cent on a 280,000 EUR building is 5,600 EUR more to deduct a year, about 2,352 EUR of tax at 42 per cent. It pays if you hold the flat.

The building share of the land transfer tax raises your base

In Hesse the land transfer tax is 6.0 per cent, so 21,000 EUR on a 350,000 EUR flat. The building share of it, 16,800 EUR, joins the amount you deduct from (Sec. 255 (1) HGB; Federal Fiscal Court IX R 43/11).

Two notary fees on the same day, treated completely differently

The purchase contract and your entry as owner are part of what the flat cost, so they trickle back over decades. Registering the bank's charge is a cost of borrowing and comes off in full in the year you pay it. Both arrive on one invoice.

A vote at the owners' meeting can move your deduction by years

A one-off levy for a real improvement is not deducted at once; it comes back slowly instead. Money paid into the reserve fund counts in the year the association spends it. Read the last three sets of minutes before you sign.

Spreading a repair bill is worth 8,008 EUR in the right year

A larger repair bill may be spread over two to five years (Sec. 82b EStDV). On a steady income that changes little: 30,000 EUR of repairs against 92,000 EUR of income saves 12,492.62 EUR at once and 12,600.00 EUR spread. The same bill during parental leave, on 28,000 EUR of income, saves 8,008 EUR more by being spread.

Send us the listing and we go through it with you.

Four costs count as part of what the flat cost you, and the building share of each joins the amount you deduct from: land transfer tax, the notary fee, the registry fee and your share of the agent's commission. The Federal Fiscal Court applies this to rented property (IX R 15/15) and confirmed it for the commission (9 May 2017, IX R 24/16). All four split in the same proportion as the price (IX R 43/11).

On the example flat that is 30,730 EUR more

Worth about 258 EUR of tax a year on the steady route, every year, for fifty years. It is one of the lines most often left out of a first tax return.

Borrowing costs come off in the year you pay them

Registering the bank's charge, the valuation and any arrangement fee come off in full in the year you pay them, not over decades. What a loan can look like across 600+ banks sits on our page about mortgages for expats in Germany.

One rule worth knowing before you renovate

Spend more than 15 per cent of the building's price on renovation within three years of buying and the whole amount is treated as production cost: it comes back slowly, over decades, instead of at once (Sec. 6 (1) no. 1a EStG).

Selling within ten years adds your deductions back to the gain

Hold the flat longer than ten years and nobody asks about your deductions again. Sell in year four and the amount claimed is added back to the taxable gain. On a three- to six-year posting that is the deciding number (Sec. 23 (3) EStG), and it has its own page on the speculation tax and the ten-year rule.

A low-income year changes what the same deduction is worth

Parental leave, a gap between contracts or your first part-year in Germany pushes your rate down for twelve months. One legal tool moves money between years: larger repair bills may be spread over two to five years (Sec. 82b EStDV).

The land-and-building split is agreed in German, in one afternoon

The notarial contract sets how the price divides between building and land, and that number sets every figure on this page. A split that follows what the two are really worth is normally accepted (Federal Fiscal Court, IX R 12/14). Walk in knowing the local land value and 75 per cent is defensible where 55 would otherwise have been written down.

Can I choose my depreciation rate?

The law ties it to the year the building was finished: after 2022 it is 3 per cent, 1925 to 2022 is 2 per cent, before 1925 is 2.5 per cent. Two exceptions apply: an expert report on the remaining life, or a special route (Sec. 7 (4), (5a), 7b, 7h, 7i EStG).

I am buying a 2024 new build in 2027. Do I get the faster 5 per cent?

That route needs you to have built it or to buy in the year it was finished. A 2024 building bought in 2027 gets 3 per cent a year instead, the highest standard rate (Sec. 7 (5a), 7 (4) EStG).

Do I still need a specially certified surveyor?

Since 1 December 2025, any sound expert method is accepted; the standard table of lifespans alone is not (Federal Fiscal Court, 23 January 2024, IX R 14/23). Whether the surveyor must inspect the flat in person is still argued, so expect a conversation with your tax office.

Do the costs of buying really increase what I can deduct?

The building share of them, yes. Land transfer tax, notary, registry and your share of the commission all join the base. On the example flat that is 30,730 EUR more to deduct from, worth about 258 EUR of tax a year.

Can I take the energy bonus and the faster 5 per cent at the same time?

Yes, the law allows both. The conditions are strict: Efficiency House 40 with the sustainability seal, a permit after 31 December 2022, cost under 5,200 EUR per square metre, and ten years of letting (Sec. 7b EStG).

What happens to everything I deducted if I sell after four years?

Every euro deducted is taken off what the flat counts as having cost you, so it becomes taxable gain at your personal rate. After ten years, counted contract to contract, a private sale is outside the rule (Sec. 23 (3) EStG).

Ask any other question in a free 15-minute call in English.

Absetzung fuer Abnutzung (AfA)

Depreciation, the deduction for wear and tear. Entered from line 33 of the rental annex to your tax return.

Bemessungsgrundlage

The amount you deduct from: the building share of the price plus the building share of the buying costs.

Restnutzungsdauer

How many years the building has left. What a surveyor certifies if you want a faster rate (Sec. 7 (4) EStG).

Anschaffungsnebenkosten

The costs of buying, on top of the price. The building share of them is deductible (Sec. 255 (1) HGB).

Geldbeschaffungskosten

The costs of borrowing: registering the charge, the valuation, arrangement fees. Deducted in full in the year you pay.

Erhaltungsaufwand

Repairs and upkeep. Deducted at once, or spread over two to five years if that lands better (Sec. 82b EStDV).

Nachtraegliche Herstellungskosten

Improvements rather than repairs, including the 15 per cent renovation rule. Added to the amount you deduct from.

Lohnsteuerermaessigung

An allowance on your monthly wage tax. It turns next spring's refund into money in this month's pay (Sec. 39a EStG).

The figure at the top of this page. 3,068 EUR is the income tax the first full year of letting gives back on the example: a 350,000 EUR flat finished in 1978, 80 per cent of it building, bought with a loan at 4.0 per cent, let on a 92,000 EUR salary. Rent minus interest, running costs and the 5,600 EUR building line leaves a loss that is set against the salary, and the 2026 tariff of Sec. 32a EStG gives 3,068 EUR back. The building line alone is worth 2,352 EUR of it. The calculator on this page shows the same number: change the price, the building year or the salary and it moves with them.

The model. Rate by building year under Sec. 7 (4) EStG, 5 per cent declining for a qualifying new build under Sec. 7 (5a) EStG. Income tax from the Sec. 32a EStG tariff for 2026, basic allowance 12,348 EUR, zones 17,799 / 69,878 / 277,826 EUR. Rent 4.18 per cent of the price a year; upkeep 11.50 EUR per square metre a year for a new build and 18.62 EUR otherwise, management 372.46 EUR a year (Secs. 26 and 28 II. BV); loan at the rate in the field with 2 per cent initial repayment. Mortgage rates: Deutsche Bundesbank MFI interest rate statistics, new housing loans to households, reporting month July 2026. Published averages, yours to change.

What we may and may not do. Working out figures, checking the split and preparing the file cost you nothing. Filing your return and advising on your tax are reserved for licensed tax advisers, and we keep to that — we work with tax advisers from our network and hand them a file that is already complete (Secs. 2 and 5 StBerG). We are paid by the lender or insurer, as commission, and only if something is arranged.

Not an offer. These are orientation figures on the 2026 rules, not individual tax advice, not a lending decision and not an offer. Written August 2026, last checked 10 September 2026. Expat Finance Germany is a broker tied to no single bank, licensed under Secs. 34c, 34d, 34f and 34i GewO; register numbers are on the about page, in the imprint and in the small print.

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