Depreciation Calculator: AfA and tax saving for let German property

AfA stands for Absetzung für Abnutzung, the German term for depreciation. If you let a property, you may claim the wear and tear of the building against tax each year. This depreciation reduces your income from letting and therefore your income tax. One point matters most: only the building is depreciable, not the land, because land does not wear out.

Most calculators show you only the depreciation amount. That is half the story. What counts is the real tax saving: depreciation times your marginal tax rate. That is exactly what this tool works out, together with the saving over the full period and the moment the depreciation runs out.

You may depreciate only the building share, so splitting the price into building and land is the biggest lever. A high building share means more depreciation. For flats the building share is often 70 to 80 percent, for houses on a large plot much lower.

A detail many miss: the acquisition costs count towards the base pro rata too. Property transfer tax, notary, land registry and any agent commission raise the base in the proportion they fall on the building. Our calculator adds this automatically by federal state. Estimate your property value first with the property valuation calculator and the closing costs with the closing costs calculator.

Note: the tax authority uses its own worksheet for the split. The Federal Fiscal Court has ruled it is not binding (ref. IX R 26/19). Where the split is disputed, an expert appraisal often helps.

For residential new builds started between 1 October 2023 and 30 September 2029 there is an option for declining-balance depreciation under § 7 Abs. 5a EStG: 5 percent, but of the remaining book value rather than the purchase price. That gives markedly more depreciation in the early years and therefore an earlier tax saving. Later the amount falls, so you may switch once to straight-line as soon as it is higher. Our calculator finds this optimal switch year automatically.

Which is better depends on interest rates and your holding period. Whoever needs the saving early does better with declining-balance; whoever plans steadily for the long term stays straight-line.

On top of the regular depreciation, § 7b EStG allows a special depreciation of 5 percent per year over the first four years, up to 20 percent extra. It is the strongest lever of all, but tied to conditions: the building application must be filed after 31 December 2022 and before 1 October 2029, the building must meet the EH40 efficiency standard with the sustainable-building seal (QNG), and it must be let for residential use for at least ten years.

Two limits are decisive: build costs may not exceed 5,200 € per square metre. This is a strict threshold; exceed it and the entire relief falls away, not just the excess. And the base is capped at 4,000 € per square metre. Our calculator checks both limits and warns you before you miscalculate.

For a listed building or one in a redevelopment area, the eligible restoration costs are written off in full over twelve years under § 7i or § 7h EStG: 9 percent in years 1 to 8 and 7 percent in years 9 to 12. The old building runs in parallel as normal straight-line depreciation. A certificate from the heritage authority is required.

If your building is genuinely worn faster than the typical useful life, you can prove a shorter remaining life with a qualified appraisal. At a remaining life of 25 years the rate rises, for example, from 2 to 4 percent. Whether the appraisal is worth it depends on the extra depreciation and your marginal rate.

Depreciation is the biggest lever but not the only one. From the rent you deduct all costs of letting: besides depreciation above all the loan interest (the principal repayment, however, is not deductible), maintenance, non-apportionable management costs and travel. If this leaves a loss, it reduces your other tax. In the calculator you can add these costs under the further details and see the letting result at once.

Beware of renovations shortly after purchase: if repairs within the first three years exceed 15 percent of the building acquisition cost, they count as acquisition-near production costs (§ 6 Abs. 1 Nr. 1a EStG). You then cannot deduct them at once, only slowly via depreciation. Our calculator warns you if your planned renovation breaks this limit.

And one more thing few tools show: depreciation is finite. After 33, 40 or 50 years the building is fully written off. From that year the depreciation is gone as a deductible cost, your taxable rental surplus rises and with it the tax. We call this the AfA cliff and show you the year it hits.

Depreciating land: not possible. Only the building wears out.

Owner-occupied property: if you live in the property yourself, you cannot claim depreciation. Depreciation requires a source of income, that is, letting. Exceptions apply only to listed buildings (§ 10f EStG) and energy retrofits (§ 35c EStG).

Inherited property: on a gratuitous transfer by inheritance or gift you continue the previous owner's depreciation; no new base arises. How much inheritance tax is due is shown by the inheritance tax calculator.

As of July 2026. The rates, deadlines and tariff values shown apply unchanged. This text does not replace tax advice.