When Sonder-AfA ends: will the investment still work in year five?

It can, if you budget for the change before you buy. When special depreciation (Sonder-AfA) ends after its fourth year, your rent and your mortgage payment stay exactly the same. What changes is your taxable rental result, and with it the tax relief that has been topping up your cash flow. In our fictional Leipzig example, a household at a 42 per cent marginal rate goes from about €150 a month in hand in 2029 to about €240 a month out of pocket in 2030: a swing of about €395 a month. At 30 per cent, the swing is about €280. The apartment still shows a tax loss in 2030. The relief shrinks; it does not disappear.

Whether a project qualifies is covered in Sonder-AfA under § 7b. This guide covers your rental property after Sonder-AfA ends.

Sonder-AfA under § 7b(1) EStG runs for the year of acquisition and the following three years: 2026 to 2029 for an apartment acquired in 2026. Everything else continues:

• Loan interest, deductible as an income-related expense (Werbungskosten) (§ 9(1) sentence 3 no. 1 EStG). It falls slowly as the loan is repaid.
• Owner-paid running costs, such as the administration share of the service charge (Hausgeld) and unit management.
• Ordinary depreciation (AfA), at 3 per cent a year for a residential building completed from 2023 (§ 7(4) EStG), but on a smaller remaining value from year five.

Two cash payments were never deductible: loan principal, and contributions to the owners' maintenance reserve, which count only when the association spends them (BFH, IX R 19/24).

Sonder-AfA brings deductions forward; it does not add to them. After the four years, § 7a(9) EStG bases ordinary depreciation on the remaining value (Restwert) and a § 7(4) rate adjusted for the remaining useful life. In its worked example, the Federal Finance Ministry spreads the remaining value of a 3 per cent building over 29 years: 33 years less the four already used (BMF letter of 21 May 2025, no. 66, Example 7(b)).

Apartment B's schedule, from our Sonder-AfA guide:

Assumptions as in our Sonder-AfA guide: building cost €228,437.50, Sonder-AfA base capped at €200,000, income tax only at 42 per cent.

From 2030, €166,736 divided by 29 gives €5,750 a year, until the basis is used up in 2058. That is about €1,104 a year less than the €6,853 an owner without Sonder-AfA would still deduct. The €40,000 claimed early comes back as lower deductions from 2030 and a schedule that ends in 2058 instead of 2060.

With declining-balance AfA alongside Sonder-AfA (linear or degressive AfA), the 2030 deduction would be about €7,711, but the step down from 2029 slightly larger (about €12,500 against €11,100), because the earlier deductions were larger too. Your tax adviser (Steuerberater) should confirm the remaining-life convention: on other readings, B's 2030 figure would be between about €5,527 and €5,684.

Illustrative example. Fictional figures, not a forecast or tax calculation. Apartment B from our new-build comparison: Leipzig, 50 m², €250,000 plus €18,750 purchase costs; completion and transfer of benefits and burdens on 1 November 2026; assumed to meet the § 7b conditions, with Sonder-AfA claimed in full and linear AfA as in the table above. Loan €225,000 (90 per cent of the price) at an assumed 3.7 per cent nominal, paid out in stages as in our Bereitstellungszinsen example: €216,250 drawn by handover, interest only plus 0.25 per cent a month commitment interest on the undrawn €8,750 until the final payout in March 2027, then €1,068.75 a month (2 per cent initial repayment) from April 2027. Empty in November and December 2026, with the owner paying the full €260 Hausgeld; let from January 2027 at €825 cold rent, held flat. From January 2027, a month: non-recoverable Hausgeld €90, of which €50 is the maintenance-reserve contribution; unit management €35; allowances of €15 for repairs and 2 per cent of rent for vacancy. Costs held flat. The taxable result deducts interest, the other €40 of Hausgeld, management and depreciation; the reserve contribution and the allowances are not deducted. Interest before completion, and the €5,000 kitchen with its separate depreciation, are left out. Rounded to whole euros.

In 2030, the taxable result rises by €11,287. About €11,100 of that is depreciation; about €180 is lower interest. After 2030, the loss keeps shrinking by roughly €190 to €200 a year as interest falls, although the cash flow does not change at all. Taxable profit and cash flow are different numbers, and they do not move together.

The same apartment, 2029 against 2030:

Nothing about the apartment changes on 1 January 2030: the tenant pays the same rent and the bank collects the same €1,068.75. Only the tax line moves. The taxable result and the cash flow differ for three reasons:

• Depreciation is not a payment. It lowers taxable income without money leaving your account, so its end raises taxable income without money arriving.
• Principal is a payment but not a deduction. It grows every year, from €4,706 in 2028 to €5,455 in 2032, while deductible interest falls by the same amount.
• Reserve contributions and allowances leave your account as cash, but are not deducted when paid.

Over the whole period:

Tax effect = taxable result × marginal rate, shown in the year it relates to. 2027 includes three months of interest-only payments before repayment begins. A constant rate is a simplification: in 2026, 42 per cent applies to a single filer from €69,879 of taxable income (§ 32a EStG) and 30 per cent is roughly a single filer's rate at about €35,000, so a large loss can pull income into a lower band.

The monthly method is in our cash-flow guide; multi-year returns after tax are in IRR, yield and equity return.

With a payroll allowance. Because Sonder-AfA is claimed, B's loss can be reflected in monthly wage tax from the start, without the usual wait until the year after acquisition (§ 37(3) sentences 8 and 10 EStG; see Lohnsteuerermäßigung). The allowance (Freibetrag) then follows the expected loss: about €15,800 for 2029, but only about €4,500 for 2030. An allowance registered for 2029 and 2030 together would be too high for 2030: changes to your disadvantage must be reported promptly, and too little wage tax withheld is reclaimed (§ 39a(1) sentences 3 and 5, (5) EStG). At 42 per cent, expect roughly €395 a month less net pay from January 2030; payroll tables, not a flat rate, decide the exact figure.

Without one. The large 2029 refund usually arrives during 2030 and can hide the change for a year. The squeeze shows when the smaller 2030 refund arrives in 2031.

On these assumptions, the household needs about €395 a month more from 2030 than in 2029 at 42 per cent, and about €280 more at 30 per cent. The apartment then costs about €240 or €290 a month after tax. Four levers help, in different ways.

A reserve built from earlier tax savings. At 42 per cent, the after-tax surpluses for 2026 to 2029 add up to about €10,400. Kept in a separate account rather than spent, they cover the shortfalls of 2030 to 2032 and run out during 2033. At 30 per cent, the same years leave only about €3,100, less than one year's shortfall, so the gap must come from income from late 2030.

A rent review within the law. B's first rent was set outside the rent brake because the flat was first used and let after 1 October 2014 (§ 556f BGB), but later increases follow tenancy law. You can ask the tenant to agree to an increase up to the local comparative rent, taking effect once the rent has been unchanged for 15 months and capped at 20 per cent over three years, or 15 per cent in designated areas (§ 558 BGB). A new-build rent already at the top of comparable rents leaves little room. An index-linked rent or agreed rent steps require a written agreement, normally in the lease (§ 557b and § 557a BGB). Rent rising 2 per cent a year from 2028 would add about €50 a month by 2030, about €29 after tax at 42 per cent: helpful, but not the whole gap.

Sondertilgung trade-offs. A special repayment (Sondertilgung) of the €10,400 in January 2030 would cut the debt by about €12,600 by March 2035. But the monthly payment stays €1,068.75, and with less interest to deduct, the after-tax cash flow is about €14 a month worse in 2030. It builds equity, but closes the gap only if your contract lets you lower the repayment rate. See Sondertilgung or a cash reserve.

The refinancing date. If B's ten-year fixed rate ran from the loan agreement in March 2025, it ends in March 2035, with about €183,200 still owed, because repayment only began in April 2027. A higher rate then would be a second step on top of this one. See job loss and refinancing.

Selling or moving in is not a neutral way out. The ten-year letting commitment runs on to 2035 or 2036, depending on how it is counted, and ending it early can reverse all €40,000 of Sonder-AfA (§ 7b(4) EStG; see our Sonder-AfA guide).

Alpha Minoris's Buyer's Agent service starts before the property search, with your budget, borrowing capacity and readiness. Before a new-build purchase in Berlin, Dresden or Leipzig, that discussion can cover the years after the allowance as well as the first ones, and waiting can be the outcome. You need not live in the city. Your Steuerberater confirms the tax treatment, including the remaining-life convention and any payroll allowance.

If you are weighing a new-build apartment with Sonder-AfA, test the budget for 2030 as well as 2027 before you sign. Discuss your first rental property with Alpha Minoris.