The German Economic Institute (IW) has compared the tax treatment of property owners in Germany with that in six other European countries in a recent analysis. The result: self-occupiers are clearly at a disadvantage in this country. If someone buys a condominium in a metropolis for 300,000 euros and lives in it themselves, they miss out on a return of around 87,000 euros compared to a landlord over 15 years.
The reason lies in tax law: landlords can depreciate the property and deduct expenses such as loan interest or maintenance costs from tax. Self-occupiers are denied this deduction. According to the study, the return on capital employed is almost nine percent for landlords, but only six percent for self-occupiers. Outside major cities, the disadvantage is smaller, at 40,000 to 50,000 euros.
Germany performs particularly poorly in international comparison. In countries such as the Netherlands, France or Austria, the state promotes owner-occupation – for example through lower ancillary purchase costs or higher taxation of rental income. In Germany, by contrast, landlords achieve the highest return of all countries surveyed at an average of around seven percent, while self-occupiers achieve the lowest. This is also reflected in the homeownership rate: in 2022, only 44 percent of Germans lived in their own four walls, while the EU average was around 70 percent.
IW real estate expert Michael Voigtländer criticized the policy: “Homeownership is wealth accumulation and old-age provision in one – the state could promote this with an allowance on property transfer tax for self-occupiers.” Many people dream of owning a home, but the German state puts obstacles in their way. The study compares Germany with six European countries, including the Netherlands, France and Austria.
Source: www.faz.net
