The German government is seeking to introduce tax incentives to support a struggling construction industry and encourage investment in housing, according to a report in sister publication, IPE Real Assets.
The cabinet is proposing new rules through the Wachstumschancengesetz, or Growth Opportunity Act, for the amortisation of costs incurred by construction companies in the form of a so-called 'degressive depreciation for residential buildings'.
According to the draft law, from 1 October companies will be able to deduct 6% of the costs for a period of six years as a form of incentive.
Recent rises in interest rates have made development projects significantly more expensive. In a 10-point plan, the governing coalition said this was putting pressure on the construction industry and the situation was being exacerbated by existing regulations.
The ruling coalition aims to build 400,000 new homes per year, 100,000 of which will be state-funded.
According to the Federal Statistical Office, 295,300 apartments were built in Germany last year, just 0.6% or 1,900 apartments more than in the previous year.
'The degressive depreciation for residential construction has the potential to significantly strengthen the construction and real estate industry,' said Klara Geywitz, minister for housing, urban development and building.
'It enables the industry to write off investment costs more quickly, which in turn makes faster investments in new living space possible.'
