Property maintenance in Germany
Public utilities
Property tax (before multiplying by the local tax rate)
Insurance costs for a 100 m² apartment
German property maintenance costs include taxes, insurance and utility payments. Average expenses vary between federal states: for instance, in the cities of Mönchengladbach and Wuppertal located in North Rhine-Westphalia, property maintenance is more expensive than in all the other regions.
Extra expenses to be taken into account are:
- electricity costs. A household of two spends €50 per month while using central heating, for example;
- phone and Internet connections cost about €35 per month;
- radio and television tax (€17.50 per month regardless of the number of residents and devices).
Property maintenance costs in Germany
Major | |
|---|---|
Property tax | €200–700 per annum (for a standard apartment) |
Property insurance | €70–120 per annum (for a residential property of 100 m²) |
Public utilities | €2.20/m² per month |
Extra expenses when leasing
For individuals | For legal entities | ||
|---|---|---|---|
Income tax | 14.77–47.475% of the rental income | 15.825% of the rental income | |
Tax advice fee (optional) | €100-250 per hour (+VAT), tax return submission ≈ €785 (incl. the tax) | ||
Management company fee (optional) | €18-30 per property per month (net) | ||
From 411,000 €
Completion in: 2024.II Total of 160 apartments
From 330,000 €
Completion in: 2022.IV Total of 35 apartments
From 363,000 €
Completion in: 2024.III Total of 219 apartments
From 316,000 €
Completion in: 2025.II Total of 60 apartments
From 990,000 €
Built in 2023 Total of 12 apartments
From 675,000 €
Completion in: 2023.III Total of 71 apartments
From 856,000 €
Completion in: 2024.I Total of 81 apartments
From 749,000 €
Completion in: 2024.IV Total of 20 apartments
If the property owner rents it out, the costs of electricity and Internet connection fall on the tenant's shoulders.
The payments for heating and other utilities are made from the rent. Insurance is optional for the tenant.
Taxes
Owners pay the annual real estate tax (Grundsteuer). Its amount depends on the property type, location, area, the market price of the land plot and the number of apartments per square metre of the land plot. The standard tax rate is 0.35%
- How is the income taxed if the owner of the property rents it out?
- For individuals, the tax rate is calculated depending on the amount of income at a progressive rate from 14.77% to 47.475%, including the solidarity surcharge for the economic recovery of the former German Democratic Republic. For legal entities the rate is fixed at 15.825% (including the surcharge). In practice, the tax amount gets significantly reduced for the owners of up to three apartments: the costs of travelling to Germany (air tickets and hotel fees), furniture and property depreciation expenses are reported in the accounting documents, lowering the tax base.
The main type of property insurance in Germany is the so-called “household insurance” (Hausratversicherung). It covers the damage caused by fire, tap water, storm, hail, robbery and other similar factors. The recommended coverage amount is €650/m², the cost also depends on the size of the apartments, the age of the residents, the length of the agreement and the choice of the insurer. For a 100 m², the expenses average €70-120 per annum.
Notably, students under 25 years of age moving out from their parents’ home to a student residence or a co-rented apartment can use their family’s insurance. This circumstance must be reflected in the agreement as an “external insurance”.
Public utilities
The owner pays the property management company for most of the utilities such as water supply, heating, yard and entrance hall cleaning, lift maintenance and waste removal. Utilities average €2.2–2.6/m² per month depending on water consumption, energy efficiency and the building's technical condition.
These annual costs are prepaid, while the report on actual expenditures can be received between January and March of the following year. If the residents or tenants have used a greater amount of utilities, they compensate the difference to the owner or the property management company, and if they use a lesser amount of utilities, they receive a refund themselves.
Usually, the expenses are divided in the warm (warm) and the cold (kalt) ones. Warm expenses — are the costs of water and heating supply. They can be reduced by regulating the consumption of water and heat. Cold expenses are the charges for the sewer usage and waste removal as well the house and street cleaning, garden maintenance, cellar and outdoor facilities lighting, chimney sweeping and so on. These expenses cannot be reduced.
Monthly average property maintenance costs in Germany in 2020, €/m²
Property tax | 0.27 |
Water supply | 0.25 |
Sewer usage | 0.23 |
Precipitation disposal | 0.05 |
Lift usage | 0.18 |
Street cleaning | 0.04 |
Waste removal | 0.16 |
House manager’s fee | 0.18 |
Building cleaning and maintenance | 0.15 |
Snow shovelling | 0.05 |
Garden maintenance | 0.1 |
Lighting | 0.05 |
Chimney sweeping | 0.07 |
Insurance | 0.16 |
Communal antenna usage | 0.12 |
Other “cold” expenses | 0.07 |
Heating | 0.72 |
Hot water supply | 0.26 |
Other “hot” expenses | 0.19 |
Do many Germans use gas heating?
Apartment buildings typically have central heating, while detached houses sometimes are heated with gas. In this case, the owner signs an independent agreement with a gas provider. For example, a family living in a house of 150 m² spends €120 per annum on gas heating. The year the property was built in also affects the costs level.
Extra expenses on rental property
If the owner of the property rents it out, he or she can delegate maintenance to an agent or a special management company. Their services cost from €18 to €30 net per month per property depending on its size and region of location, and €20-26 per residential unit for commercial apartment buildings.
The fees for finding tenants are charged separately and can range from one to three monthly rents, depending on the region.
In most cases, property owners contact tax advisors to calculate and pay the income tax. An individual would pay €250-500 (+VAT) for filing and submitting the tax return.
The costs of legal entity bookkeeping depend on the company turnover, the average is €755 per month.
Accountants charge an average of €100 per hour for providing advice and answering the client’s questions.
Legal entity maintenance costs in Germany, € per month
Bookkeeping services | 755 | |
Legal address | 190 | |
Radio terminal (tax) | 34 | |
Banking commission | 30 | |
Total: | ≈ 1,000 |
Property maintenance in other countries:
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