Tax reduction with new depreciation

Special depreciation (deduction for wear) is a subsidy for rental housing construction, which allows German income-taxable builders to write off the investment in new apartment buildings.

The regular depreciation of 2% has now been increased by the Federal Cabinet to 5% in the first 4 years. Calculated are the acquisition or production costs of the building.

The special depreciation also applies to investments in existing buildings that lead to new living space. These include the addition of a residential building to another floor or the expansion of the roof truss.

The construction costs for the eligibility for the special depreciation may not exceed EUR 3,000 per square meter, of which, however, a maximum of EUR 2,000 will have a tax effect.