Advantages and disadvantages of landmarked properties
Historically preserved buildings and houses, known as landmarked or listed buildings, are considered by many to be a living dream come true. Often, these are Altbaus that have a special historical charm. However, some financial expenses for the maintenance of a historically preserved property must be considered. Nevertheless, buyers of such a property can have their investment and subsequent maintenance supported with the help of subsidies and tax benefits. Listed houses are therefore a high-yield option not only for owner-occupation, but especially as an investment property. When in good condition, such properties can generate high demand among tenants and corresponding profits.
Distinctive features of historically preserved buildings
Not only is a listed building older, but there are other criteria that determine whether a building will be landmarked. The relevant requirements are regulated in the Monument Protection Act of the respective federal state in which a building is located, which leads to regulations that are not uniform throughout Germany. The local Office for the Protection of Historical Monuments or the State Office for Monument Preservation is the point of contact here. However, there are common factors that go into the classification. In addition to the year of construction, they include the rarity value, the structural quality and the architecture of the object. This means that buildings such as lighthouses, prisons, barracks or hospitals can also be listed. The categorization results in conditions that property owners must observe, for example, when it comes to expansions or modifications as well as refurbishments and renovations. There are significantly more restrictions here than for buildings that are not listed.
Purpose of the protection of historical properties
The purpose of historic building preservation is to protect and permanently preserve cultural monuments and historically relevant structures without altering, impairing or destroying them. This means that any alteration or conversion of a listed building may not be carried out, or only to a limited extent. In this way, properties deemed worthy of protection are preserved.
Obligations for landmarked properties
If you buy a listed property, you must pay attention to various aspects. For example, major renovation work is only possible when the heritage office is consulted, and only if it does not change the appearance of the building. The preservation of the property is also the responsibility of the property owner, as owners of such properties are obliged to repair and modernize the building, while at the same time preserve its historic character. Foundations for the historical preservation of buildings are the points of contact for questions regarding this topic. The best-known one is the German Foundation for Monument Protection, a private, non-profit foundation that is financed by donations and is committed to the preservation of monuments. Anyone who wants to find out about the obligations of historic building preservation will find expert help there.
Financial support for landmarked properties
Even if the financial expenditure is higher, the tax benefits for listed buildings are a crucial factor that should not be neglected if you are interested in purchasing such a property. Specifically, investors who want to renovate a property and then rent it out receive some tax benefits. One thing to keep in mind here is the Denkmal-AfA, which regulates the amount and time over which maintenance costs may be claimed for tax purposes. Accordingly, as a property owner, you are allowed to deduct a total of nine percent of the modernization and renovation expenses from your taxes in the first eight years after acquiring the property and seven percent in the following four years. In addition, there is depreciation (AFA: Absetzung für Abnutzung) for regular capital investments. This considers the wear and tear on the structure of an Altbau, so that the acquisition costs are also deductible. In addition, there are various other subsidy options such as the KfW subsidy, which can be claimed when listed buildings are renovated to be more energy efficient.
Translated by Marit Hunt
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