German real estate tax deductions for renovation costs

Real estate investors in Germany may have opportunities to claim renovation costs as immediate tax-deductible maintenance expenses for the 2026 tax year, provided certain conditions are met before year-end.

Under § 6 Abs. 1 Nr. 1a EStG, renovation and modernization costs can be fully deducted in the year they occur if they do not exceed 15 percent of the building's acquisition costs (excluding land value) within the first three years of purchase. If this 15 percent threshold is exceeded, the costs must be treated as part of the acquisition costs and depreciated over several years.

Deutsche Sachwert Kontor AG is offering a specific project, DSK Nr. 58 ‘Stadtpalais’, which consists of eight individual condominiums in a renovated building in Halle (Saale). Planned renovation expenses for these units range from approximately 24,000 to 80,000 euros, which could potentially be utilized for tax purposes.