The 15% Trap: § 6 Abs. 1 Nr. 1a EStG

Spend too much on the flat too soon after buying and your immediately deductible repairs are retroactively converted into anschaffungsnahe Herstellungskosten - capitalised and written off at 2% over 50 years instead of deducted at once. A €25,000 bathroom becomes €500 a year.

The BMF letter of 26 January 2026 (IV C 1 - S 2253/00082/001/064) consolidates the rules, replacing the letters of 18 Jul 2003 and 20 Oct 2017, and applies to all open cases.

The test

Within three years, counted day-precisely from the transfer of economic ownership (Übergang von Besitz, Gefahr, Nutzen und Lasten - not the notary date), do repair and modernisation costs exceed 15% of the building's acquisition costs? Amounts are measured excluding VAT, which quietly gives you about 19% more headroom than the gross invoices suggest. The work need not be finished, invoiced or paid within the three years - only commenced.

What counts

Almost everything, including Schönheitsreparaturen (cosmetic work: wallpapering, painting walls, ceilings, floors, radiators, doors, windows). The BFH settled this in 2016 and the 2026 letter confirms it. Materials you buy for DIY count too.

What does not

1. Erweiterungen - extensions (they are Herstellungskosten in their own right anyway).
2. Erhaltungsarbeiten, die jährlich üblicherweise anfallen - routine annual servicing (lift, boiler maintenance).
3. Your own labour. Eigenleistung has no deductible value at all - § 9 EStG needs actual outlay - so DIY reduces your deduction and consumes less of the 15%.

Separately, a bundle of works lifting the standard in at least three of the four core areas (heating, sanitary, electrics, windows) is a Standardhebung and becomes Herstellungskosten regardless of the 15% figure.

Planning

On €138,450 of building cost the headroom is €20,768 net, roughly €24,700 gross. Budget against that number, keep a running tally per invoice, and push non-urgent work past the three-year date.

Not tax advice - model the renovation timing with a Steuerberater before you commit.