Housing construction has been booming for years, but the sharp rise in interest rates on loans and more expensive materials are causing problems for the construction industry. The traffic light wants to steer against it.
The federal government wants to boost the ailing housing construction with tax incentives. It is about extended depreciation options for residential buildings, as can be seen from an updated draft of the Growth Opportunities Act, which is available to the German Press Agency. The draft is to be decided on Wednesday at the cabinet meeting in Meseberg.
The plan is to introduce a so-called degressive depreciation – depreciation with annually decreasing depreciation amounts – limited to six years and with the start of construction from October 1, 2023. This could cost the state around half a billion euros per year. Construction Minister Klara Geywitz (SPD) had proposed such tax breaks for new residential buildings from January 2024. The degressive depreciation promotes faster refinancing and is intended to create investment incentives that are intended to stabilize the construction industry.
Housing construction has stalled
Most recently, housing construction, which had been booming for years, had stalled due to the sharp rise in interest rates on loans and more expensive materials. The construction industry felt this clearly. The proposed tax cuts are part of a package planned by Finance Minister Christian Lindner (FDP) to support the economy, which is struggling in the economic downturn.
His draft for the Growth Opportunities Act was blocked two weeks ago by Family Minister Lisa Paus (Greens). The reason was a dispute about basic child security. However, the coalition has now agreed on key points.
Tax breaks of an average of around 7 billion euros per year until 2028 are now planned, around 400 million euros more than previously planned. A core element of the draft is a premium for investments in climate protection.
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
