Insights /
Regulatory Update
/
May 2026
Germany: new tax incentives for investors
2025 Investment Booster, corporate tax cuts, and what they mean for deal structuring
Context
In July 2025, Germany’s "Immediate Tax Investment Program Act" (Investitionssofortprogramm) came into effect. This is the first major tax incentive package from the new coalition government.
The document was signed on July 18, 2025, and includes a series of measures that directly impact investment decisions in real estate and related assets.
Key changes
Four regulations shaping the 2025–2028 framework.
Investment Booster · up to 30%
Accelerated depreciation for movable fixed assets
A declining-balance depreciation option has been introduced for movable fixed assets acquired or created between July 1, 2025, and December 31, 2027. The rate is up to 30% per year of the net book value (not to exceed three times the straight-line rate). In the early years, this creates significantly higher tax deductions compared to the straight-line method, reducing the tax burden and improving liquidity.
Important: direct real estate (buildings, land) is excluded from the scope of this rule. The booster applies to equipment, machinery, and IT infrastructure. For real estate investors, this means it can be utilized when structuring through an operating company that holds tangible assets within the property.
Corporate tax · from 2028
Phased corporate tax reduction
The coalition agreement provides for a gradual reduction of the corporate tax rate from the current 15% to 10% by 2032. The reduction will begin on January 1, 2028. The tax rate on undistributed profits will be reduced accordingly, from 28.25% to 25% by 2032.
For investors using a GmbH structure (the standard model for foreign buyers of German real estate), this means a reduction in the total tax burden at the company level over a 5–7 year horizon. This is a significant factor when evaluating long-term investment cases.
AfA · unchanged
Standard real estate depreciation — current rates
Current building depreciation standards remain unchanged: 2% per year for existing properties and 3% for new builds (for the first 8 years, provided the building permit application was filed after December 31, 2022). Special depreciation (Sonder-AfA) under §7b EStG provides for an additional 5% per year for the first 4 years for qualifying residential properties.
Grunderwerbsteuer · 3.5–6.5%
Real estate transfer tax
Real estate transfer tax rates vary from 3.5% to 6.5% depending on the federal state. No changes are expected in 2025–2026. However, when structuring via a share deal (purchasing shares in a company that owns real estate), partial optimization is possible under certain conditions. This instrument requires a detailed legal analysis in each specific case.
Practical implications for investors
The combined effect of these measures creates a more favorable regulatory environment for long-term investment in German assets.
Key takeaways:
Planning horizon
The corporate tax reduction starting in 2028 makes purchases made in 2025–2026 potentially more profitable if the asset is held for more than 5 years.
Structuring via GmbH
Still the optimal model for foreign investors in terms of tax regime, transparency, and exit flexibility.
Combining instruments
For transactions with an operational component (hotels, serviced offices, mixed-use), a combination of a movable asset booster and a standard AmA for the building is available.
Important: All structuring decisions require an individual tax analysis involving a German tax advisor.
// KEY FIGURES
Investment booster
Validity period
Corporate tax
Start of reduction
Building depreciation
Real estate transfer tax
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