Rainer Schorr says the german state is giving away money — and investors are missing out on it!

Rainer Schorr: FRG is giving away money

The Federal Government has set itself ambitious goals for housing construction. However, it is still far from reaching its target of 1.5 million new flats in the current legislative period. Especially in many large and university cities, the housing markets remain tight.

The special depreciation for rental housing has been available for about a year now as a means to at least accelerate the construction of rental housing: In the first four years after completion, five percent of the construction and acquisition costs can be claimed against tax. The federal government assumes that the special depreciation will support the construction of up to 600,000 flats. And according to forecasts, the state will have this subsidy instrument cost the state around 410 Millionen euros by the end of 2022 alone.

The enthusiasm about the special depreciation for affordable housing is nevertheless limited. Because there are many unanswered questions about the financial benefits of the new regulation. Neither the approval figures nor the feedback from the companies have so far shown that the concept works. The Corona crisis also brought many things to a standstill. The Federal Ministry of Finance has now, apparently in order to boost enthusiasm among companies, put a “calculation scheme for determining the relevant economic advantage from the special depreciation” on its homepage, so that everyone potentially entitled to it can take another training course.

Rainer Schorr, managing director of the PRS Family Trust, considers the promotion to be underestimated by the industry. “Taking into account the still existing linear depreciation of two percent, property developers and investors can write off a total of 28 percent of the costs of a new rental apartment against tax in the first four years. This is an enormous incentive, even if only production costs of a maximum of 2,000 euros per square meter are taken into account. In general, the paragraph in question clearly bears the signature of the SPD, which is why apartments with production costs of more than 3,000 euros per square metre are expressly excluded from the subsidy. “Don’t promote anything that the voter base might consider a luxury, but only standard rental housing.”

Moreover, the units must be rented for ten years, whereby vacancies in the meantime do not have a harmful effect, but self-use does. Those who move in themselves within the deadline lose their entitlement to the subsidy. “The offer is valid until December 31, 2021 and could significantly promote the construction of rental housing,” says Schorr. “The advantages are only too little known and the handling, as is unfortunately often the case in Germany, is somewhat cumbersome. But because apartments are needed in the big cities and their surrounding areas, developers and investors could also see this depreciation option as an indication of an urgently needed commitment.

Rainer Schorr also talks about this on YouTube.




Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Economic productivity is important. Do you actually know what it means?

Brexit and Resilience


Amid Trade War, A Look at China’s Role in Global Economy

Let’s Call High Unemployment What It Is: A Strike

Costa Renting Not So High Under Prop. 10

Saving Unemployment Insurance

6.28.20 — Weekly Wealth Wrap-up


Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
PRS Family Trust

PRS Family Trust

More from Medium

Crypto Rewards Credit Cards Available in the UK

Do I crypto or not?

James Pelton’s Top 5 Crypto Projects

Is Terra Luna a New Opportunity in 2022?