Glossary
AfA (Absetzung für Abnutzung)
Building Depreciation. The annual tax write-off on a rental building's value (never the land): 2% for buildings completed 1925–2022, 2.5% pre-1925, 3% from 2023 — plus a 5% degressive option for new projects started 10/2023–09/2029.
AfA turns paper depreciation into real tax savings: it reduces taxable rental income every year without costing cash. On a €400,000 apartment with €320,000 building share completed in 2024, 3% AfA deducts €9,600 annually.
The degressive 5% option (Wachstumschancengesetz, § 7 Abs. 5a EStG) front-loads deductions in the high-interest early years and can be combined with the § 7b special depreciation for efficient new builds (EH40/QNG). Switching from degressive to linear later is allowed.