In order to provide for some relief on the – in some German regions – tight apartment market the construction of new rental apartments shall be subsidized. According to the Federal Finance Minister Schäuble the respective measures shall be selective and temporary.
At the beginning of February 2016 the federal government cabinet has approved the draft law and presented the draft law to the German Federal Parliament on March 2, 2016. In order to actually enter into force the draft needs to pass parliamentary procedures: The following changes are according to the draft law planned:
- Special depreciation (in addition to the regular depreciation) of 10% in first and second year as well as 9% depreciation in third year after acquisition / construction.
- Special depreciation is limited to parts of the building which is used for residential purposes.
- In order to be entitled to the special depreciation the limit for the construction costs is EUR 3.000 per sqm. The maximum amount for which the special depreciation is possible shall be EUR 2.000 per sqm.
- Only newly constructed or newly acquired buildings shall be subsidized. This means that the building application / construction notification needs to be made in the years 2016, 2017 or 2018. The date of completion of the building shall not be decisive.
- The subsidized area must be used for residential purposes for at least 10 years. Otherwise the special depreciation will be denied retroactively.
- Only buildings which are constructed in designated areas in which the apartment market is tight shall be subsidized.
Federal Council of Germany and states have already suggestion for improvement. Recommendation is that the relief shall be independent from the taxpayer's income in order to also support households which do not pay taxes due to low income.