Acquisition costs

Around 8% purchase costs (transfer tax, notary, land registry) are added to the purchase price.

= €345,600 acquisition costs

Depreciation base: the building share

Only the building is depreciated, not the land. We assume a building share of 80% of the acquisition costs.

= €276,480 depreciation base

5% declining-balance depreciation (§ 7 (5a) EStG)

Each year, 5% of the remaining value can be depreciated – €13,824 in year one, slightly decreasing afterwards. Requirement: construction start between 10/2023 and 9/2029 – fulfilled at JOKO 19. The declining balance is not limited in time; switching to the 3% straight-line depreciation would only pay off from around year 14.

The taxable result

Rental income is taxable – offset by interest, depreciation and administration as income-related expenses. In the first years the result is clearly negative and lowers your taxable income.

Your tax advantage

The negative result is offset at your marginal tax rate according to the official tariff (§ 32a EStG). At €65,000 gross this is 37.4%.

− €13,519 × 37.4% = €5,056 tax saving per year — €421 per month

Your monthly cash flow

Now everything comes together: the instalment (3.56% blended rate + 1.5% amortisation) versus rent and tax saving. Year 1 shows a surplus – and cumulated over 10 years the total own contribution is only approx. €5,400 – practically ±0. Against this stand approx. €56,500 of loan amortisation as wealth build-up; the tax-free appreciation comes on top.