Denkmal-AfA
Germany supports the private restoration of its monument-protected buildings through one of the most significant depreciation instruments in its tax law. This page explains exactly how it works — clearly enough to take to your tax adviser — and lets you estimate it for your own income.
01
Germany has a clear, long-standing interest in preserving its monument-protected buildings. Restoring them properly is expensive, so the state supports the private owners who take it on — clearly and substantially — by letting them deduct the certified restoration costs from their taxable income. The mechanism is called Denkmal-AfA (Absetzung für Abnutzung — depreciation), defined in §7i and §10f of the German Income Tax Act (EStG).
The certified restoration costs are typically 80% of the purchase price. That share — not the land, not the existing building substance — is what becomes deductible, on a schedule fixed by law.
02
You rent out the apartment
Deduct the certified restoration costs from your taxable income over twelve years: 9% per year in years 1–8, then 7% per year in years 9–12. Across the twelve years, the full 100% of the restoration share is deducted. The rental income is taxable in the normal way; the depreciation offsets the rental income and part of your income from other sources such as salary — lowering your annual tax bill.
You live in it yourself
Deduct 90% of the certified restoration costs as special expenditure (Sonderausgaben) over ten years: 9% per year. This route is for buyers who occupy the apartment themselves rather than letting it.
The certified restoration costs are the figure the responsible authority confirms — not the whole purchase price. Your notarial contract separates land, existing substance and restoration so the deductible share is documented.
03
Take a €200,000 monument apartment bought by an investor with €100,000 of gross annual income. The price splits into two parts: the building itself (not restored) at €40,000 — 20% — and the certified restoration cost at €160,000 — 80%.
The building depreciates at 2.5% per year; the restoration share at 9% per year (years 1–8). In the first year that is:
deducted from taxable income
At a €100,000 income, the top of your income is taxed at a marginal rate of about 42%. Deducting €15,400 therefore saves roughly €6,468 in year 1 — about €539 a month — and a comparable amount each year through year 8, then lower in years 9–12 as the rate steps from 9% to 7%.
The exact number depends on your income, your marginal rate, and the certified restoration share of the specific apartment — which is why the calculator below works from your own figures.
Illustrative example, not individual tax advice. Your actual benefit depends on your circumstances and the specific property; your tax adviser's assessment is authoritative.
04 · Klar Calculator
Klar Calculator
Typically 80% of the purchase price. Estimated marginal rate at this income: .
General information, not individual tax advice. The assessment by your tax adviser is authoritative.
05
Three things have to hold.
The building is under Denkmalschutz, entered in the Denkmalliste.
Typically 80% of the cost, approved by the responsible heritage authority.
The deductible costs are certified by that authority (the Bescheinigung) before they can be claimed.
There is a quiet logic worth noting here. During the restoration, the heritage authority (Denkmalschutzbehörde) inspects the work on site — and the same oversight that holds the build to standard is what produces the certification your deduction depends on. The control that protects the quality of the building and the document that secures your tax benefit are, in other words, the same process. We handle the heritage-authority coordination as part of the development; you receive the Bescheinigung your tax adviser needs.
06 · Investors
For investors, Germany's ten-year Spekulationsfrist applies: hold the apartment for more than ten years, and any capital gain on the sale is tax-free for private individuals (§23 EStG).
Less widely understood is what happens to the depreciation you have already claimed. With many accelerated write-offs, the benefit is really a deferral — the depreciation is recaptured when you sell. Here it is not. After the ten-year holding period, the depreciation taken under Denkmal-AfA is not recaptured (keine Nachversteuerung): the years of tax saving stay with you, and the gain on the sale is free as well.
So the depreciation runs over twelve years, the tax-free-gain window opens at ten, and what can look like a time-limited benefit becomes a permanent one. Both halves reward holding the asset rather than trading it.
General information, not individual tax advice.
Next
The Klar Guide places this in the wider picture — financing, the buying process, and what to look for in any Denkmal offer. Or bring your own income figures to a consultation, with your tax adviser in CC.