Sonder-AfA (Sonder Absetzung für Abnutzung)
Enhanced depreciation for new construction and renovated properties
Sonder-AfA (Special Depreciation under §7b EStG) is an enhanced tax benefit for newly constructed rental properties in Germany. It allows you to accelerate depreciation significantly beyond the standard AfA rate in the first four years.
How It Works
For qualifying new-build properties, you can claim 5% annual Sonder-AfA for the first 4 years, on top of the standard AfA. Because new constructions completed after December 31, 2022 already benefit from a 3% standard AfA rate (up from the old 2% under JStG 2022), the combined rates are:
- Post-2022 new build: 5% Sonder-AfA + 3% standard AfA = 8% per year
- Pre-2023 new build (historical): 5% Sonder-AfA + 2% standard AfA = 7% per year
Real Example
New Construction Property (completed 2024):
- Building value: €400,000
Years 1-4 (with Sonder-AfA):
- Standard AfA (3%): €12,000/year
- Sonder-AfA (5%): €20,000/year
- Total deduction: €32,000/year
- Tax savings (42% bracket): €13,440/year
Total extra tax savings vs. standard AfA alone over 4 years: €33,600
Eligibility Requirements (§7b EStG)
- New construction only: Property must be newly built (Neubau) and used for residential rental
- Building permit window: The building permit must have been granted between October 1, 2023 and September 30, 2029
- Construction cost cap: Eligible construction costs must not exceed €5,200 per square meter of living space
- Rental purpose: The property must be rented out for residential purposes for at least 10 years
Why This Matters
Sonder-AfA front-loads your tax benefits, giving you significantly more tax savings in the early years when you typically have the highest financing costs. Combined with the higher 3% base AfA rate for post-2022 buildings, new construction now offers substantially better depreciation advantages than before JStG 2022. This can turn a marginally negative cashflow property into positive territory.
Related Terms
AfA(Absetzung für Abnutzung)
AfA (Absetzung für Abnutzung) is the German term for depreciation on investment properties. It allows you to deduct 2% of the building value from your taxable income each year for 50 years.
New Construction(Neubau)
New construction (Neubau) refers to properties built recently. They qualify for Sonder-AfA tax benefits and typically have lower maintenance costs but higher purchase prices.
Tax Savings(Steuerersparnis)
Tax savings from real estate come from deducting property expenses (interest, depreciation, costs) from your taxable income, reducing the amount of income tax you pay.