Property Investment Simulator

In Germany, you can buy rental properties and benefit from rental income, property appreciation, and significant tax advantages. Most investment properties are financed with bank loans (often 100%+ financing), and the interest payments, depreciation, and operating costs are tax-deductible against your income. This means you can often generate tax savings that offset a large portion of your monthly costs.

The Spekulationsfrist is a German tax rule that makes capital gains from property sales tax-free if you hold the property for more than 10 years. This is one of the biggest advantages of German real estate investing — if you buy a property for €500,000 and sell it for €700,000 after 10+ years, the €200,000 gain is completely tax-free. If you sell before 10 years, gains are taxed at your marginal income tax rate.

Degressive depreciation (degressive AfA) allows you to deduct 5% of the building value from your taxable income each year. This is calculated on the remaining book value, so the absolute deduction decreases over time. For a building worth €500,000, you can deduct €25,000 in year 1, €23,750 in year 2, and so on. This significantly reduces your taxable income and creates substantial tax savings, especially in the early years.

German banks typically offer long-term fixed-rate mortgages (Annuitätendarlehen) with fixed interest rates for 10-15 years. For investment properties, you can often finance 100% or more of the purchase price (including closing costs). The key parameters are the interest rate and repayment rate. A typical structure might be 4-5% interest with 1-2% initial repayment. The loan payments are split between interest (tax-deductible) and principal repayment (builds equity).

The main tax benefits include: (1) Depreciation — you can deduct 5% degressive or 2-3% linear depreciation of the building value annually. (2) Interest deductions — all loan interest is tax-deductible against rental income. (3) Operating costs — management, maintenance, and other property costs are deductible. (4) Acquisition costs — notary fees are deductible in the first year. These deductions often create a tax loss from the property that reduces your overall tax bill.

This simulator uses official German tax formulas (Progressionszonen) for 2026 and standard financial calculations for loan amortization, depreciation, and property appreciation. It provides a realistic estimate based on the assumptions shown. However, actual results will vary based on market conditions, specific property performance, changes in tax law, vacancy periods, maintenance costs, and other factors. Use this as an educational starting point, not as financial advice.

Cashflow is the money flowing in and out each month — rental income minus loan payments, operating costs, plus tax savings. It tells you how much you need to pay out of pocket (negative cashflow) or receive (positive cashflow) each month. Total return includes everything: the net proceeds from selling the property (after paying off the loan and selling costs), plus all the cashflow accumulated over the holding period. Total return is the complete financial outcome of the investment.