What's changing for tenants and home owners in Germany in 2023?
Whether larger tax rebates or lower heating costs, here are the biggest changes which home renters and owners in Germany need to know about.
Greater housing benefits
Around two million households will be able to receive the new "Wohngeld Plus" housing benefit, up from the current 600,000 who receive Wohngeld (housing benefit). The allowance is also set to more than double from €180 to €370 per month.
“The benefit paves the way for economical and family-friendly housing. Tenants and owners with lower incomes can receive this housing allowance," wrote a government spokesperson in a statement.
READ ALSO: EXPLAINED: Which benefits are increasing in Germany in 2023 - and how do I claim them?
More rent indexes
Cities with more than 50,000 inhabitants must prepare a Mietspiegel, an index of current rents paid by tenants, broken down into factors such as size and location.
The lists were set to be available starting on January 1st, 2023, though in some cases cities with more complex indexes had their deadlines extended to January 1st, 2024.
More flexibility with ‘Home Office’
The continuation (and increase) of the so-called Home Office allowance means that taxpayers can claim an amount of €5 for each calendar day on which they work exclusively at home. From 2023, the yearly maximum will be capped at €1,000 instead of the previous €600.
This means that in future, 200 instead of 120 days of working from home will be eligible for tax deductions. The regulation also applies if no separate space is available.
READ ALSO: Germany to extend (and increase) tax rebate for people working from home
A woman working from home in Germany. Photo: picture alliance/dpa/dpa-Zentralbild | Sebastian Kahnert
More tax deductions for housing changes
Homeowners planning to refurbish their homes in the coming year will be able to take advantage of an increased tax credit. The depreciation rate for completed work will be increased from two to three percent from July 1st, 2023. Anyone setting up a photovoltaic system in their home will also be able to claim a tax credit.
Gas price brake
For private households, the gas price is to be capped at 12 cents per kilowatt hour between March 2023 to April 2024, for 80 percent of annual consumption from the previous year. The gas price brake (for gas and heat) is to apply from March 1st, 2023, to April 30th, 2024, for both tenants and owners.
In March, the relief amounts for January and February 2023 will also be credited retroactively.
READ ALSO: German households to receive relief for gas costs 'starting in January'
Electricity price brake
The electricity price brake is also to apply from March 1st, 2023, to April 30th, 2024. Here, too, the relief amounts for January and February 2023 will be applied retroactively in March.
The electricity price for private consumers and small and medium-sized enterprises (with electricity consumption of up to 30,000 kWh per year) will be capped at 40 ct/kWh gross, including all taxes, levies, surcharges and network fees. This applies to the basic requirement of 80 percent of the previous year's consumption.
Landlords take over the CO2 levy
The CO2 levy (CO2 Abgabe) - which is based on a household’s carbon dioxide (CO2) emissions - has so far been paid primarily by tenants. Through an amendment to the existing law, in place since 2021, landlords will also be asked to foot the bill for the the levy starting January 1st.
Currently, €30 must be paid per ton of CO2 emitted when burning oil and gas. By 2025, the levy will gradually increase to up to €55 per ton.
Inheritance tax increasing
Anyone who’s going to be inheriting a home should take note: The inheritance and gift tax (Erbschaftsteuer) will be going up starting on January 1st. However, the exact amount of increase depends on several factors, such as who the property was inherited from (ie. a parent or a more distant relative) and its current value - meaning being gifted a flat in the middle on Munich could even be prohibitively expensive, as critics of the new legislation point out.
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Greater housing benefits
Around two million households will be able to receive the new "Wohngeld Plus" housing benefit, up from the current 600,000 who receive Wohngeld (housing benefit). The allowance is also set to more than double from €180 to €370 per month.
“The benefit paves the way for economical and family-friendly housing. Tenants and owners with lower incomes can receive this housing allowance," wrote a government spokesperson in a statement.
READ ALSO: EXPLAINED: Which benefits are increasing in Germany in 2023 - and how do I claim them?
More rent indexes
Cities with more than 50,000 inhabitants must prepare a Mietspiegel, an index of current rents paid by tenants, broken down into factors such as size and location.
The lists were set to be available starting on January 1st, 2023, though in some cases cities with more complex indexes had their deadlines extended to January 1st, 2024.
More flexibility with ‘Home Office’
The continuation (and increase) of the so-called Home Office allowance means that taxpayers can claim an amount of €5 for each calendar day on which they work exclusively at home. From 2023, the yearly maximum will be capped at €1,000 instead of the previous €600.
This means that in future, 200 instead of 120 days of working from home will be eligible for tax deductions. The regulation also applies if no separate space is available.
READ ALSO: Germany to extend (and increase) tax rebate for people working from home
More tax deductions for housing changes
Homeowners planning to refurbish their homes in the coming year will be able to take advantage of an increased tax credit. The depreciation rate for completed work will be increased from two to three percent from July 1st, 2023. Anyone setting up a photovoltaic system in their home will also be able to claim a tax credit.
Gas price brake
For private households, the gas price is to be capped at 12 cents per kilowatt hour between March 2023 to April 2024, for 80 percent of annual consumption from the previous year. The gas price brake (for gas and heat) is to apply from March 1st, 2023, to April 30th, 2024, for both tenants and owners.
In March, the relief amounts for January and February 2023 will also be credited retroactively.
READ ALSO: German households to receive relief for gas costs 'starting in January'
Electricity price brake
The electricity price brake is also to apply from March 1st, 2023, to April 30th, 2024. Here, too, the relief amounts for January and February 2023 will be applied retroactively in March.
The electricity price for private consumers and small and medium-sized enterprises (with electricity consumption of up to 30,000 kWh per year) will be capped at 40 ct/kWh gross, including all taxes, levies, surcharges and network fees. This applies to the basic requirement of 80 percent of the previous year's consumption.
Landlords take over the CO2 levy
The CO2 levy (CO2 Abgabe) - which is based on a household’s carbon dioxide (CO2) emissions - has so far been paid primarily by tenants. Through an amendment to the existing law, in place since 2021, landlords will also be asked to foot the bill for the the levy starting January 1st.
Currently, €30 must be paid per ton of CO2 emitted when burning oil and gas. By 2025, the levy will gradually increase to up to €55 per ton.
Inheritance tax increasing
Anyone who’s going to be inheriting a home should take note: The inheritance and gift tax (Erbschaftsteuer) will be going up starting on January 1st. However, the exact amount of increase depends on several factors, such as who the property was inherited from (ie. a parent or a more distant relative) and its current value - meaning being gifted a flat in the middle on Munich could even be prohibitively expensive, as critics of the new legislation point out.
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