Top returns thanks to repayment subsidy of EUR 3 million and very high tax benefits thanks to special AFA

Modern young living with modern heating technology in a KFW 40 QNG energy-saving house in a top location. 58 apartments are being built here in a KFW 40 QNG energy-saving house with good facilities. All apartments are designed to be barrier-free. Communal rooms are also planned. It is possible to obtain public funding for the apartments from the Investitions- und Strukturbank Rheinland-Pfalz (ISB Rheinland-Pfalz). A loan of up to EUR 6,148,000 can be granted here. A repayment subsidy of up to EUR 3,074,00 is granted on this funding with a commitment period of 30 years. The repayment subsidy is booked after settlement and proof of proper occupancy. The loan installments are paid from the reduced amount. The repayment rate is at least 1%. The loans are interest-free for the first 10 years. Thereafter, the interest rate is only 0.5% for years 11 to 15 and only 1% for years 16 to 30. The details are regulated in detail in programs 556 and 557.
The rent for this subsidy is EUR 230 per unfurnished apartment - EUR 275 per month for furnished apartments + ancillary costs with an annual increase of 1.75 %. Additional rent may be charged for parking spaces. This results in rents of EUR 191,400 per year for the furnished apartments plus parking space rents of approx. EUR 10,000 per year - i.e. a total of approx. EUR 201,400.
We assume no liability for the granting of the subsidy or its amount.
If the apartments are purchased by the year of completion and rented out in accordance with the current amendments to the Economic Opportunities Act, they can be depreciated using the declining balance method at an annual rate of 5% based on the respective book value/residual value.
Due to the construction to the KFW 40 QNG standard, an additional 5% special depreciation based on construction costs of EUR 4,000 per m² can be claimed in the first 4 years in accordance with the provisions of Section 7 b of the German Income Tax Act (ESTG). In accordance with the applicable guidelines, the gross floor area including basement and ancillary areas is also permissible for the measurement of these areas. By combining residential rental depreciation and declining balance depreciation, a total of around EUR 2.5 million in depreciation can be claimed in the first 4 years. We assume neither tax advice nor liability for tax objectives. Talk to your tax advisor. They will be happy to provide you with comprehensive and professional advice.
The purchase price is EUR 6,780,000 unfurnished plus EUR 290,000 for furnishings.