Contents page 1 tax breaks for luxury apartments page 2 — Even more houses in the second row On a page to read

The Grand coalition wants to solve the housing crisis, and more affordable housing. On Monday, the Finance Committee of the Bundestag discussed special depreciation allowances for investors to create more rental space will increase. But the idea solves the Problem? Claus Michelsen, economic chief, and real estate expert at the German Institute for economic research in Berlin, is skeptical.

The Federal government has announced a housing, a offensive, and in the current legislative term, the construction of a total of 1.5 million homes promised. In addition to an additional million for social housing and the already established baukinder money special depreciation should provide for more rental housing. These have proven their effectiveness in the past already several times in the past: Finally, the German investor is said to have the inside and the investors is particularly pronounced control part rubbed. However, this Instrument has left the one or other crop damage: many of The West-German soldiers of fortune, have sunk in the nineties, your money in the East German real estate market, can sing a song about it.

Claus Michelsen

directs the Department of forecasting and economic policy at DIW Berlin.

The Finance Committee has discussed this Monday on just such a project. The goal is to build more housing, to create on the other hand, housing in the “affordable” Segment – what exactly is it, however, remains unclear. Clear only: The construction is so far, or cost the limit of 3,000 euros per square metre, shall not exceed the cost (the cost of the land are removed). These costs can be depreciated in the first four years, 28 percent in the income tax Declaration. This is true for projects in Munich, Düsseldorf or Berlin, as well as in Stendal, Vechta and Bad Saulgau.

So far, So good. But whether these proposals will actually encourage the volume of new Construction where it is needed, and additional housing will be created in the required pricing segment, may be doubted. Instead, the measures to further increases in the construction and real – estate prices, as well as spatial problems could result in power steering systems. Some of these aspects can be cured with Changes in the design. The other can only be met if additional measures are taken: It needs more land and the municipal planning capacity in the building authorities must be rebuilt.

the risk of Deadweight

Generally, investment incentives are useful when a General investment restraint, investment is urgently needed. Although there is a lack especially in cities, to living space, however, neither the investors nor the necessary capital for the financing are missing there. For this reason alone, high deadweight effects in the case of a broad tax incentives is likely.

But the promotion is also granted in regions where, apparently, no shortage of housing and far away from the centers, which could relieve you may by a new building in the periphery. And that’s exactly where the promotion unfolds its largest incentive: Where the price of land does not fall into the weight, the conveyor rate of return higher: The incentive to invest more in the depreciable cost of the building. It is not expected to arise apartments in the lower price segment, but rather more expensive apartments will be built.

This could be in the current economic situation is counterproductive, if this works increase the price. And also the scarcity of the land, it is expected that an additional demand, at least in the urban centres of buoyancy of the already hefty price more fired up.

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