Real estate
Depreciation (AfA) is the tax write-off of a building's value over its useful life, reducing a landlord's taxable income.
Depreciation (AfA) lets landlords write off the building value (excluding land) over its useful life for tax purposes. The depreciation amount reduces taxable income.
Common rates are 2% per year for buildings from 1925 onwards, 2.5% per year for buildings built before 1925 and 3% per year for new buildings from 2023 (declining-balance depreciation is possible here). Certain new builds also qualify for special depreciation.
Depreciation is among the largest tax advantages of property investment. On a building value of 200,000 EUR at 2% depreciation, taxable income falls by 4,000 EUR per year, and that over a period of 50 years.
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