However, in the 2022 German Annual Tax Act, lawmakers re-introduced the special depreciation allowance in a modified form and linked it to compliance with specific building efficiency requirements. The new rules for the concession apply to construction projects for which the application for a building permit was filed in 2023 to 2026, or a notice of intended building works was placed during this period. As under the previous provisions, in the first four years a special depreciation allowance of 5% per year can be deducted in addition to scheduled depreciation. To claim this concession, the newly constructed apartment has to be in a building that fulfils the criteria of the so-called Efficiency House 40 standard with sustainability class/building efficiency level 40; proof of this has to be provided in the form of the Qualitätssiegel Nachhaltiges Gebäude (QNG) [German sustainable building certification].
Moreover, the acquisition and construction costs may not exceed €4,800 per sq m of living area. Under the previous rules, this upper limit for construction costs was €3,000. The assessment basis used to calculate the special depreciation may not exceed an amount of €2,500 per sq m of living area (previously €2,000).
Please note: The upper limit for construction costs of €4,800 should not be confused with the maximum limit for the concession of €2,500 because the former figure determines whether or not the concession applies while the latter figure is merely a cap on the amount of the depreciation.