Depreciation (AfA)
Depreciation (AfA) for real estate explained: How does tax depreciation of buildings work in Germany? Rates, useful life, and special rules for landlords.
Also known as: tax depreciation, capital allowance, Absetzung fuer Abnutzung
Depreciation for wear and tear (AfA - Absetzung für Abnutzung) allows property owners in Germany to deduct the acquisition or construction costs of a building over its useful life for tax purposes. For residential buildings completed after 31 December 2022, a straight-line depreciation rate of 3% over 33 years applies. For older buildings, rates of 2% or 2.5% per year apply depending on the year of construction. Depreciation applies exclusively to the building itself - land is not depreciable. Listed buildings qualify for accelerated depreciation under § 7i EStG. (§ 7 EStG)