New Construction (Neubau)
Newly built properties and their tax advantages
New construction (Neubau) properties are newly built buildings that have never been occupied. They offer unique tax advantages through Sonder-AfA but typically come with higher purchase prices and lower initial yields.
The Tax Advantage: Sonder-AfA
The primary appeal of new construction is Sonder-AfA (special depreciation):
- Years 1-4: 5% annual Sonder-AfA + 2% standard AfA = 7% total depreciation
- Years 5+: 2% standard AfA continues for 46 more years
Real Example: New vs. Existing Property
Existing Property (Altbau)
- Purchase price: €450,000
- Building value: €360,000
- Annual AfA (2%): €7,200
- Tax savings (42% bracket): €3,024
New Construction (Neubau)
- Purchase price: €520,000
- Building value: €450,000 (higher %)
- Annual deduction (7%): €31,500
- Tax savings (42%): €13,230
Extra €10,206/year in tax savings for first 4 years
Advantages of New Construction
- Higher depreciation: Front-loaded tax benefits improve early cashflow
- No renovation needed: Everything is new and warrantied (Gewährleistung)
- Modern standards: Energy efficiency (lower Nebenkosten), contemporary layouts
- Low maintenance: Minimal repairs for first 10-15 years
Disadvantages of New Construction
- Higher price per m²: Typically 15-20% more expensive than comparable existing properties
- Lower initial yield: Higher price with similar rents = lower rental yield
- Construction delays: Risk of project delays affecting your timeline
- Unknown neighborhood: New developments may take years to mature
Who Should Consider Neubau?
New construction makes sense if you're in a high tax bracket (42%+) and prioritize tax savings over immediate cashflow. The Sonder-AfA can turn a marginally negative cashflow into positive territory.
Related Terms
Sonder-AfA(Sonder Absetzung für Abnutzung)
Sonder-AfA is an enhanced depreciation benefit for newly built properties. It allows you to deduct 5% annually for the first 4 years, in addition to the standard 2% AfA.
Existing Property(Bestandsimmobilie)
Bestandsimmobilie refers to existing, previously owned properties. They typically have lower purchase prices than new construction but may require more maintenance and don't qualify for Sonder-AfA.