Letting below market rent in Germany — the 50% and 66% thresholds
Below 50% of the local market rent the letting is split: expenses are deductible only in proportion to the rent actually paid. From 66%, a letting intended to last is deemed fully for consideration.
2026 rules — verified on September 23, 2026Free, no account
This content is part of the path: Letting a property and paying tax on it· Step 6 of 8· Next step: German rent increase check — the cap and the local comparative rent
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Sources and assumptions
- gesetze-im-internet.de — EStG § 21 Abs. 2 Satz 1 — tax year 2026, verified on September 23, 2026
Excerpt from the source : « Beträgt das Entgelt für die Überlassung einer Wohnung zu Wohnzwecken weniger als 50 Prozent der ortsüblichen Marktmiete, so ist die Nutzungsüberlassung in einen entgeltlichen und einen unentgeltlichen Teil aufzuteilen. »
- gesetze-im-internet.de — EStG § 21 Abs. 2 Satz 2 — tax year 2026, verified on September 23, 2026
Excerpt from the source : « Beträgt das Entgelt bei auf Dauer angelegter Wohnungsvermietung mindestens 66 Prozent der ortsüblichen Miete, gilt die Wohnungsvermietung als entgeltlich. »
Calculation assumptions
- The local market rent is an input (rent index or comparable flats); the tool does not estimate it.
- Expenses are entered as an annual total — depreciation, loan interest, repairs and running costs together.
- Between 50% and 66% (or where the letting is not meant to last) the statute gives no arithmetic rule: expenses are not cut, but the intention to make a profit remains open to review.
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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.