Property market's latest updates and trends. - Tax break for promoting accessible housing options
The federal government aims to increase the supply of affordable rental apartments by providing tax relief to those who offer permanently affordable housing. This measure, known as social rentability, was first introduced but later abolished in Germany in 1990. In their coalition agreement, the SPD, Greens, and FDP agreed to reinstate it.
Companies that choose to participate in this program must offer their apartments at rental prices lower than the market value. Unlike social housing, these properties would continue to be capped at low rental prices.
The government estimates that around 100 social companies, associations, and charitable foundations could take advantage of this regulation. As a result, approximately 105,000 low-income tenants could benefit from the lower rental rates.
However, the Tenants' Union expressed doubts about the effectiveness of this plan in creating more permanent affordable housing. President Lukas Siebenkotten pointed out that there are no investment grants associated with the regulation. According to him, this will only benefit companies that are already socially conscious.
The housing industry considers the tax cuts as a positive step in addressing the housing crisis but urges the government to establish a comprehensive funding system. Currently, there is a shortage of 800,000 apartments, and rising costs and interest rates only exacerbate the problem. The housing industry believes a short-term interest rate program is necessary to create more affordable housing.
