Greater housing advantages

The new “Wohngeld Plus” housing benefit will be available to about two million households, up from the existing 600,000 who get Wohngeld (housing benefit). The allowance will also more than double, rising from €180 to €370 per month. “The benefit opens the path for affordable and family-friendly homes.” This housing stipend is available to lower-income tenants and owners, according to a government official.

More rental indexes

Cities having a population of more than 50,000 people must create a Mietspiegel, which is an indicator of current rentals paid by renters, broken down by characteristics such as size and location. The lists were supposed to be published on January 1st, 2023, however several cities with more sophisticated indexes had their deadlines pushed out to January 1st, 2024.

Price reductions for the following things:-

• More tax breaks for home improvements:- Homeowners who intend to renovate their houses in the coming year will be eligible for a larger tax credit. From July 1st, 2023, the depreciation rate for finished work will be increased from 2% to 3%. Anyone installing a solar system in their house will be eligible for a tax credit.
• Electricity price reduction:- The power price freeze will also be in effect from March 1st, 2023 to April 30th, 2024. In this case, too, the relief amounts for January and February 2023 will be retrospectively applied in March. Private customers and small and medium-sized businesses (with an annual power usage of up to 30,000 kWh) will have their electricity prices capped at 40 cents per kWh gross, including all taxes, levies, surcharges, and network fees. This pertains to the fundamental criterion of consuming 80 percent of what was consumed the prior year.
• Gas price reduction:- Gas prices for private households will be set at 12 cents per kilowatt hour from March 2023 to April 2024, for 80 percent of yearly use from the preceding year. The gas price freeze (for gas and heat) will be in effect for both renters and owners from March 1st, 2023 to April 30th, 2024. The relief amounts for January and February 2023 will also be retrospectively credited in March.

‘Home Office’ provides more freedom

The continuance (and expansion) of the so-called Home Office allowance implies that taxpayers can claim €5 for each calendar day spent working only from home. From 2023, the yearly maximum will be €1,000, up from €600 before. This implies that instead of 120 days, 200 days of working from home will be eligible for tax deductions in the future. If no distinct place is available, the regulation also applies.

Inheritance tax is being raised

Anyone who will inherit a home should be aware that the inheritance and gift tax (Erbschaftsteuer) will increase on January 1st. However, the exact amount of increase is dependent on several factors, including who the property was inherited from (i.e. a parent or a more distant relative) and its current value – which means that being gifted a flat in the heart of Munich may be prohibitively expensive, as critics of the new legislation point out.

The CO2 levy is taken over by landlords

Tenants have traditionally paid the CO2 tax (CO2 Abgabe), which is based on a household’s carbon dioxide (CO2) emissions. Discussions between the Federal Ministries of Economic Affairs and Climate Action (BMWK), Housing, Urban Development and Building (BMWSB), and Justice and Consumer Protection resulted in an agreement on the equitable sharing of the CO2 surcharge between landlords and tenants in residential and non-residential buildings (BMJ). The 10-stage approach will be implemented in January 2023. Currently, €30 must be paid for every tonne of CO2 released when oil and gas are used. The charge would progressively climb to up to €55 per tonne by 2025.

Finally, when looking for a new house overseas, we recommend that you choose a trustworthy rental platform.