Listed properties

Monument properties – High profit due to high additional tax depreciation.

Expenses for the renovation of listed buildings can be written off and these offer the highest tax benefits.

The state can only partially fulfil its task of preserving cultural assets and therefore offers owners of listed buildings correspondingly high tax advantages according to clear regulations.

The buyers invest in an exclusive real value, equipped with the land register security of a property, as well as comprehensive inflation protection and potential for appreciation. In addition, there are significant tax advantages due to the increased special depreciation for listed buildings. Experience has shown that real estate ownership contributes significantly to asset formation and vested rights.

Both owner-occupiers and owners who rent out their property receive high tax savings through income tax depreciation of listed buildings in accordance with §40 DschG in conjunction with §7i and 10f EstG.

The construction costs invested in each property in question can be claimed as income-related expenses or special expenses in the income tax return over a period of 10 or 12 years, thus significantly reducing the overall costs.

The historically low level of interest rates, a rising inflation rate and the current discussion about the security of the EURO or the security of financial investments in general additionally lead to high demand and value stability of tangible assets.

Whoever acquires a listed property can save a lot of taxes.

However, the own conversion also bears some risks, which can lead to losing the benefits due to ignorance of the regulations for the protection of historical monuments. Therefore, you should trust experienced partners who have been dividing up and renovating large listed buildings into residential units for years. This offers several advantages:

  • Massive buildings, some of which are hundreds of years old, are renovated according to the latest requirements for your quality of life.
  • ow risk with maximum benefit.

Our sample calculation shows the enormous savings potential offered by the increased depreciation for listed buildings. Your tax advantages arise mainly from the increased depreciation rates of the property renovation – i.e. the proportionate investment costs.

They can be fully tax deductible over several years. However, the prerequisite for 100% depreciation of the pro-rata investment costs is that the property is let. In this case, the refurbishment costs can be fully deducted over a period of twelve years. In the first eight years, nine percent of the sum may be written off and in the remaining four years seven percent of the sum may be written off = 100 %.

If, on the other hand, you want to move into the listed property yourself, you can even claim 90% of the modernisation costs – over a period of ten years.

Reduce your tax burden and benefit from the capital released. Because here you can save taxes quite legally and even think about your capital build-up when buying a property.

The purchase price is divided into:

  • Property
  • Old stock
  • Renovation costs

Only after completion of the work will the certificate of completion state what proportion of the overall project the construction costs represent. Here the experience of our construction partner is approx. 65 %.

The remainder of the approximately 65 % is thus made up of 17.5 % land and 17.5 % old stock.

The refurbishment costs (65 % of the purchase price) can then be written off in full as described above when the property is let:

12 years

1-8th year 9 % = 72

9-12th year 7 % = 28

In addition, the remaining old stock is still accounted for with the usual depreciation of 2.5%.

In the case of own use, the depreciation amount (65% of the purchase price) is reduced to 90% and can be depreciated at 9% over 10 years.

Save taxes with Denkmal-AfA – Here’s how

Our example client buys an apartment for 390,000 EUR in a listed building and would like to rent it out afterwards as a capital investment and tax-saving model.

He has 90,000 euros of equity capital, 300,000 euros he borrows from the bank.

Interest rate: two percent, two percent redemption and 15 years fixed interest.

In addition, he has a special repayment right of another five percent of the loan amount per annum guaranteed, so that he can noticeably accelerate the repayment of the loan if he has surpluses after his tax return.

The calculated shares according to the developer’s experience are as follows:

  • 17.5 % Land 250 EUR
  • 17.5 % Old stock 250 EUR
  • 65,0 % Rehabilitation costs EUR 500

For tax purposes, Mr. Mustermann can depreciate the building value of the property before renovation with the linear depreciation of 2.5 & and on the other hand, he can depreciate the complete renovation costs with the high monument depreciation rates – which initially amounts to nine percent plus the interest he pays on his bank loan.

Taxable annual income (old) 65.000 Euro
plus rental income (12,50 EUR/qm) 12.000 Euro
ess monument depreciation AfA (9% von 253.500) 22.815 Euro
less AfA (2,5 % von 68.250 Euro) 1.706,25 Euro
less interest (circa) 6.000 Euro
Taxable annual income (new) 46.478,75 Euro

Mr. Mustermann reduces his taxable income by initially over 30,000 euros through the investment thanks to the depreciation, which brings him considerable tax relief. In addition, his rental income is the same as the monthly rate plus interest to the bank, so he even has more money in his pocket through this investment.

How high the actual tax savings are, of course, depends on a variety of factors: Your tax bracket, number of children, tax allowances, other personal depreciation possibilities and much more.

Therefore, please ask your tax advisor for individual advice.

A worthwhile investment, because the increase in value of a property is not even taken into account here.

Incidentally, owners can also apply for subsidies for listed buildings – for example from the KfW Bank or from the federal and state governments.

Programme 151 Monument Efficiency

EUR 100,000 Loan amount at 0.75

12,5 % non-repayable grant = EUR 12 500

The region of our current offer has also been included in a structural support programme “Innovation Valley” and, according to the enclosed information on the imminent end of coal production, is to receive additional funding of EUR 15 billion over the next 20 years.