Own Home vs Investment Property Calculator

In Germany, an investment property is treated as a business activity. Mortgage interest, depreciation (AfA), maintenance, and operating costs are all deductible against your rental income — and even against your salary. An owner-occupied home offers none of these deductions because it is considered personal use, not an income-generating activity.

AfA (Absetzung für Abnutzung) is a tax deduction that accounts for the wear and tear of a building over time. For new-build investment properties completed after 2023, you can claim 5% degressive depreciation. This significantly reduces your taxable income. Owner-occupied homes do not qualify because there is no rental income to offset.

No. Unlike some countries, Germany does not allow mortgage interest deductions on owner-occupied homes. This is one of the key financial differences — when you rent out a property, the mortgage interest becomes a deductible expense against your rental income.

Instead of buying a home to live in, you continue renting your current apartment and purchase a separate investment property that you rent out to a tenant. The tenant's rent covers most of your mortgage, you benefit from tax deductions, and you keep the flexibility of renting where you want to live.

This calculator shows a simplified year-one snapshot. Over 10–15 years, mortgage interest decreases, depreciation rates change, and rents typically grow — all of which shift the comparison. For multi-year projections, use our Property Investment Simulator which models these changes over time.