The government makes a decision regarding tax-exempt status for affordable housing.
"It's great that we've been able to carry out this significant project from the coalition agreement," stated Federal Minister of Transport, Building and Urban Development Klara Geywitz (SPD). For a tenant to receive tax relief, the rent provided must be lower than the market rate. The earnings threshold is set so that approximately 60% of homes in Germany can benefit from the new housing subsidies.
This initiative is primarily for businesses, as finding employees in large cities is becoming increasingly challenging due to the housing shortage. The Ministry of Transport, Building and Urban Development anticipates that around 100 businesses will offer subsidized housing, such as company apartments, and subsequently take advantage of the tax exemption.
Geywitz continued, "Rental aid is another solid foundation for more affordable housing in our country." She added, "This is a great day for all tenants."
The response to this measure was diverse. The housing industry generally supports the introduction of rental aid. It may help, as "institutions like associations and foundations can become providers of affordable housing," said Axel Gedaschko, President of the Housing Industry Association. However, it's not enough given the "enormous" housing shortage.
The Tenants' Union strongly criticized the absence of investment grants in the final version. "It seems like all the federal cabinet agreed on was a 'mini-rental aid,'" said Tenants' Union President Lukas Siebenkotten. The Left Party also criticized, stating, "The rental aid tiger has been turned into a nightstand."
Union politicians questioned the effectiveness of rental aid in creating affordable housing. "It's clear that measures in the tax field don't enable the construction of new apartments right away, but rather over the medium term, and only in conjunction with other instruments like reducing construction costs and targeted funding programs," said CSU MP Ulrich Lange in interviews with the Bayern Media Group's newspapers.
Lange noted that rental aid is "vulnerable to misuse" and finding ways to prevent abuse without adding bureaucracy is difficult. In the past, rental aid was abolished in part because of misuse. In general, tax incentives for promoting housing construction are a good option, said the CSU politician. The Union anticipates, though, "higher deductions in the real estate transfer tax."
Paraphrased from: https://de.statista.com/news/2023/01/18/mietfoerderung-aber-was-fehlt-an-den-investitionshilfen/
Read also:
- Klara Geywitz, the SPD member in the Federal Government responsible for Transport, Building, and Urban Development, praised the implementation of a tax-exempt status for affordable housing from the coalition agreement, stating that it's a significant achievement.
- The tax exemption tied to affordable housing rents could potentially attract 100 businesses to offer subsidized living spaces, such as company apartments, as it helps address the increasing challenge of finding employees in urban areas due to a housing shortage.
- In response to the new housing subsidies, Axel Gedaschko, the President of the Housing Industry Association, noted that while the rental aid initiative was a good start, the massive housing shortage in Germany necessitates additional measures like investment grants to create more affordable housing options.
- According to CSU MP Ulrich Lange, the tax incentives for rental aid are expected to lead to higher deductions in the real estate transfer tax, as they will encourage housing construction over the medium term in conjunction with other measures like reducing construction costs and targeted funding programs.
