Greater housing advantages
The new “Wohngeld Plus” housing benefit will be available to about two million households, up from the existing 600,000 who get Wohngeld (housing benefit). The allowance will also more than double, rising from €180 to €370 per month. “The benefit opens the path for affordable and family-friendly homes.” This housing stipend is available to lower-income tenants and owners, according to a government official.
More rental indexes
Cities having a population of more than 50,000 people must create a Mietspiegel, which is an indicator of current rentals paid by renters, broken down by characteristics such as size and location. The lists were supposed to be published on January 1st, 2023, however several cities with more sophisticated indexes had their deadlines pushed out to January 1st, 2024.
Price reductions for the following things:-
- More tax breaks for home improvements:- Homeowners who intend to renovate their houses in the coming year will be eligible for a larger tax credit. From July 1st, 2023, the depreciation rate for finished work will be increased from 2% to 3%. Anyone installing a solar system in their house will be eligible for a tax credit.
- Electricity price reduction:- The power price freeze will also be in effect from March 1st, 2023 to April 30th, 2024. In this case, too, the relief amounts for January and February 2023 will be retrospectively applied in March. Private customers and small and medium-sized businesses (with an annual power usage of up to 30,000 kWh) will have their electricity prices capped at 40 cents per kWh gross, including all taxes, levies, surcharges, and network fees. This pertains to the fundamental criterion of consuming 80 percent of what was consumed the prior year.
- Gas price reduction:- Gas prices for private households will be set at 12 cents per kilowatt hour from March 2023 to April 2024, for 80 percent of yearly use from the preceding year. The gas price freeze (for gas and heat) will be in effect for both renters and owners from March 1st, 2023 to April 30th, 2024. The relief amounts for January and February 2023 will also be retrospectively credited in March.
‘Home Office’ provides more freedom
The continuance (and expansion) of the so-called Home Office allowance implies that taxpayers can claim €5 for each calendar day spent working only from home. From 2023, the yearly maximum will be €1,000, up from €600 before. This implies that instead of 120 days, 200 days of working from home will be eligible for tax deductions in the future. If no distinct place is available, the regulation also applies.
Inheritance tax is being raised
Anyone who will inherit a home should be aware that the inheritance and gift tax (Erbschaftsteuer) will increase on January 1st. However, the exact amount of increase is dependent on several factors, including who the property was inherited from (i.e. a parent or a more distant relative) and its current value – which means that being gifted a flat in the heart of Munich may be prohibitively expensive, as critics of the new legislation point out.
The CO2 levy is taken over by landlords
Tenants have traditionally paid the CO2 tax (CO2 Abgabe), which is based on a household’s carbon dioxide (CO2) emissions. Discussions between the Federal Ministries of Economic Affairs and Climate Action (BMWK), Housing, Urban Development and Building (BMWSB), and Justice and Consumer Protection resulted in an agreement on the equitable sharing of the CO2 surcharge between landlords and tenants in residential and non-residential buildings (BMJ). The 10-stage approach will be implemented in January 2023. Currently, €30 must be paid for every tonne of CO2 released when oil and gas are used. The charge would progressively climb to up to €55 per tonne by 2025.
Finally, when looking for a new house overseas, we recommend that you choose a trustworthy rental platform.
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FAQs
More tax deductions for housing changes
The depreciation rate for completed work will be increased from two to three percent from July 1st, 2023. Anyone setting up a photovoltaic system in their home will also be able to claim a tax credit.
Who is eligible for Wohngeld in Germany? ›
In order to receive it, you must either live in a community of need with a citizen's allowance recipient or generally be able to work. If this does not apply to you, you can apply for assistance with living expenses or basic income support.
How can I get out of my rental agreement in Germany? ›
"Notice of termination by the tenant is permissible at the latest on the third working day of a calendar month with effect from the end of the month after next.” In other words: you have to submit the notice of termination by the third day of the month at the latest and can then move out in three months from that time.
Why is home ownership so low in Germany? ›
Germany (49.1%) and Switzerland (42.2%) have by far the lowest rate of home ownership in Europe, due to the high cost of housing. This is far lower than in Italy (74.3%), France (63.4%), Spain (76%) and the UK (65.2%), according to Trading Economics.
Do tenants pay property taxes in Germany? ›
Anyone who owns a piece of land has to pay for Grundsteuer; Either directly or indirectly. The tax is levied on everyone who owns a property. But even if you are a tenant you still probably pay, as landlords almost always pass the cost onto tenants in the form of Nebenkosten (supplementary costs) in their contract.
What is the future of real estate in Germany? ›
The value of real estate is likely to drop to a low point in 2024, and a more stable market environment will gradually ensure a convergence in buyer and seller price expectations. We expect growth in the investment volume of around 20% compared with 2023.
What is considered low income in Germany? ›
According to the microcensus study on income and living conditions, the threshold value in Germany was in 2022: for single people with a net income of €15,000 per year. for a household with two adults and two children under the age of 14 with a net income of €31,500 per year.
What benefits am I entitled to in Germany? ›
Germany
- Family benefits. Health. Benefits for those in need of care. ...
- Health insurance cash benefits in the event of illness. Incapacity. Disability benefits. ...
- “Social compensation” benefits. Old-age and survivors. Pensions and other old age benefits. ...
- Unemployment benefits. Moving abroad.
Wohngeld (housing allowance) is a government benefit for people/families with their own sources of income. It is available both to rental tenants and people living in their own property to help them cover their housing costs.
Who is the main tenant in Germany? ›
The main tenant (Hauptmieter) is the person who is responsible for paying the rent to the landlord. The Hauptmieter can sublet the apartment, but they need permission from the landlord. The Hauptmieter can be the Wohnungsgeber and sign the Wohnungsgeberbestätigung.
Not doing so constitutes a misdemeanour and carries an automatic financial penalty. If you leave your place of residence in Germany and move abroad, you need to deregister with the relevant registration office in Germany. Why do I need a deregistration certificate?
How long does it take to evict a tenant in Germany? ›
For example, if the landlord, or a close relative, need to move into the property, the owner can request the tenant to move away. However, the time interval between the notice and the eviction can vary a lot, from 3 to 9 months, depending on the length of the rental relationship and on the urgency of the situation.
Who owns most of the homes in Germany? ›
who actually owns all the homes in Germany? Big real estate management companies own almost 6,5 of almost 20 Mio. rentals in Germany. Of these are approximately 2,2 Mio.
Is it better to buy or rent a house in Germany? ›
Conclusion. Renting and buying property in Germany each have their own set of advantages and considerations. Ultimately, the decision hinges on your financial situation, lifestyle, and long-term goals. Renting offers flexibility and lower initial costs, while buying builds equity and provides stability.
Who owns the most property in Germany? ›
In 2020, Vonovia was the largest residential landlord in Germany with approximately 415,700 residential units, followed by Deutsche Wohnen with 155,400.
What are the tax changes for Germany in 2023? ›
As of 2023, the top tax rate of 42 percent will be applied to annual incomes of 62,810 euros (2022: 58,597 euros). The basic tax-free allowance is being increased from 10,347 euros (2022) to 10,908 euros (2023). Only the income earned above this amount must be taxed.
What is the real estate outlook for Germany in 2023? ›
High interest rates and a weak economic environment pose the main challenges for Germany's real estate market in 2023. The outlook for the German economy in 2023 improved notably at the start of the year. Economic output is likely to decline somewhat, but a severe slump is not expected.
What changes in Germany in April 2023? ›
April marks the end of mandatory mask-wearing in all settings in Germany, the end of the era of German nuclear power production, and the start of the much-awaited presale of the 49-euro ticket.
What are the financial changes in Germany 2023? ›
Economic activity in Germany is estimated to have contracted by 0.3% in 2023, as projected in autumn. Private consumption suffered from a loss in purchasing power. High building and borrowing costs on top of labour shortages and elevated energy prices depressed investment in construction and energy-intensive sectors.
