Depreciation (AfA) on property —2% per year, €1,500 in tax saved
Depreciation for wear and tear (AfA) is the most important tax saving for landlords. We explain the calculation, the new 3% rates for new builds and how you can calculate your AfA even without a purchase-price invoice.
What is AfA?
Depreciation for wear and tear (§7 EStG) is the annual depreciation of the building's acquisition cost over the expected useful life. For rental property, typically:
- Altbau (vor 1925): 2,5% / 40 Jahre
- Standard (1925-2023): 2% / 50 Jahre
- New build from 2023: 3% / 33 years (declining-balance possible)
- Listed building: 9% in the first 8 years + 7% in the following 4 years
Example calculation
You buy a freehold flat for 320.000 € (incl. notary + property transfer tax: €350,000). Of this:
- On the land (not depreciable): €80,000
- On the building (depreciable): €270,000
- AfA-Satz Standard: 2% / Jahr
- Annual AfA: 270,000 × 0.02 = €5,400
- At a 35% tax rate: 1.890 € tax saving per year
- Over 50 years: €94,500 in tax savings
If you don't know how high the building's share is
In many purchases the notary contract states only a total price. Rule of thumb from the BFH:
- City flat in the centre: 60-70% building, 30-40% land
- City flat on the outskirts: 70-80% building
- Terraced house: 75-85% building
- Detached house with garden: 65-75% building
- Large plot with a small house: 50-60% building
When in doubt: a valuation by a construction surveyor (~500–1,500 €) often saves thousands of euros in tax.
Special depreciation — the little-known tax boosters
- §7b EStG: special AfA for new rental flats — 5% in the first 4 years (in addition to the normal AfA!) for acquisition 2023-2026
- §7h EStG: refurbishment in redevelopment areas — 9% annually in the first 8 years
- §7i EStG: Denkmalschutz — siehe oben, kann 100% in 12 Jahren abschreiben
- KfW-funded refurbishment: special distribution for energy-efficient modernisation
Separating AfA and maintenance expenses correctly
Important distinction:
- Maintenance expenditure (repairs, upkeep): IMMEDIATELY fully deductible (e.g. repairing the roof, replacing the heating without modernisation)
- Production expenditure (increase in value): spread over the AfA period (e.g. extension, modernisation that raises the standard)
Rule of thumb from the BFH: expenditure >15% of acquisition costs in the first 3 years → production cost (AfA). Below that → maintenance expense (immediately deductible).
How Rentprime helps you
In the Solo plan you record per property: acquisition price, building share %, year of acquisition, AfA rate. Rentprime calculates automatically:
- Annual AfA per property
- Remaining AfA amount (important for a later sale)
- Trennung Erhaltungsaufwand vs. Herstellungsaufwand bei Belegen
- Steuer-Export mit allen AfA-Beträgen vorbereitet (die richtigen Steuerformular-Zeilen)
Related topics: What can be passed on? · Tax export feature · Use the tax cockpit