AfA (Absetzung für Abnutzung)
Depreciation of the building portion of a rental property.
AfA is the German tax term for depreciation. For residential rentals, it lets you deduct 2 %, 2.5 %, or 3 % of the building portion of your purchase price each year, depending mainly on building type and completion year. The land portion (Grund und Boden) cannot be depreciated because German tax law treats land as non-wearing. A typical AfA workflow starts with the acquisition cost, splits land from building, adds qualifying acquisition costs, chooses the correct statutory rate, and then calculates the annual amount to enter in Anlage V. AfA is often one of the largest rental deductions: on a 300 000 € apartment with an 80 % building share and a 2 % rate, the annual depreciation is 4 800 €. Anlage V Easy calculates AfA as part of the ELSTER-ready report and keeps the assumptions visible for review.
Last reviewed: by Yann Lephay.