# Instandhaltung > Maintenance and upkeep expenses for property preservation Canonical: https://www.investbud.de/en/glossary/instandhaltung Last updated: 2026-10-28 Instandhaltung (maintenance) covers costs to maintain property condition, from routine repairs to major renovations. German owners' associations (WEG) build a maintenance reserve through Hausgeld, called Instandhaltungsrücklage and, in the law since 2020, Erhaltungsrücklage. It covers the common property; investors should plan a separate budget for unit-specific maintenance. For a €200,000 apartment, each percent of the purchase price you set aside per year for unit-level maintenance equals €2,000 per year on top of the building's Instandhaltungsrücklage. Instandhaltung, or property maintenance, is a critical but often underestimated aspect of real estate investment in Germany. Properly budgeting for and managing maintenance, both at the building level through the WEG and at the individual unit level, protects your property's value, keeps tenants satisfied, and prevents costly emergency repairs that can hurt investment returns. Practical Example: Annual Instandhaltung Budget for an Investment Apartment: You own a 70m² apartment built in 1985 in a well-maintained building in Stuttgart. Purchase price: €280,000. Monthly Kaltmiete: €850. Building-level Instandhaltungsrücklage (via Hausgeld): €85/month = €1,020/year. This covers the building's shared maintenance needs. Unit-level maintenance budget: If you set aside 1% of the purchase price: €280,000 × 1% = €2,800/year. Total maintenance budget: €1,020 (building) + €2,800 (unit) = €3,820/year, or approximately €318/month. In year one, you spend €1,200 on repainting the apartment between tenants and €400 on replacing a faucet, both deductible as Erhaltungsaufwand. The remaining €1,200 unit budget rolls into your reserve for future larger expenses. In year three, you replace the 25-year-old bathroom for €8,000. Assuming your total renovation spending in the first three years stays below 15% of the building's acquisition cost, this is Erhaltungsaufwand (restoration to original standard) and can be deducted in full or spread over 2 to 5 years for tax purposes. ## The Two Levels of Instandhaltung for Apartment Investors When investing in German apartments (Eigentumswohnungen), maintenance responsibilities are split between the building level (Gemeinschaftseigentum, common property) and the unit level (Sondereigentum, individual property). Understanding this distinction is essential for accurate budgeting and knowing which costs are your direct responsibility versus shared obligations managed through the WEG. - Building-level maintenance (Gemeinschaftseigentum): Roof, facade, staircase, elevator, plumbing mains, heating system, common areas, all funded through the Instandhaltungsrücklage collected via Hausgeld - Unit-level maintenance (Sondereigentum): Interior walls, flooring, kitchen, bathroom fixtures, interior doors, unit-specific plumbing and electrical, all funded by the individual owner - The Teilungserklärung (declaration of division) defines exactly which elements belong to common vs. individual property - Some items fall into a gray zone: windows, balconies, and unit entrance doors may be classified differently depending on the specific Teilungserklärung - Building-level maintenance is decided collectively by the WEG; unit-level maintenance is entirely the owner's decision ## Budgeting for Instandhaltung: Rules of Thumb and Best Practices Accurate maintenance budgeting is one of the hallmarks of a successful property investor. Many novice investors focus exclusively on the Instandhaltungsrücklage collected through Hausgeld and forget to budget for unit-level maintenance. Statutory figures are limited: the WEG only requires an appropriate reserve (§ 19 (2) No. 4 WEG) without naming an amount, while § 28 of the Zweite Berechnungsverordnung (II. BV) sets maintenance allowances per m² of living space per year for rent-controlled housing. These amounts change under § 28 (5a) II. BV. - § 28 II. BV: up to €7.10 per m² per year for apartments completed less than 22 years ago - From 22 years: up to €9 per m² per year; from 32 years: up to €11.50 per m² per year - With an elevator: plus €1 per m² per year - Budget building and unit level separately: the WEG reserve covers the common property, your own budget covers the Sondereigentum - Capex planning: Budget for major unit renovations such as bathroom and kitchen ## Tax Treatment of Instandhaltung Costs German tax law distinguishes between Erhaltungsaufwand (maintenance expenses that can be immediately deducted) and Herstellungsaufwand (improvement expenses that must be capitalized and depreciated). Understanding this distinction can significantly impact your tax planning, as immediately deductible maintenance reduces your taxable rental income in the year the cost occurs, while improvements are spread over many years. - Erhaltungsaufwand (deductible maintenance): Repairs that restore the property to its original condition: new paint, replacing broken fixtures, repairing plumbing leaks, like-for-like window replacement - Herstellungsaufwand (capitalizable improvement): Work that creates something new or significantly upgrades the property: adding a balcony, converting an attic - The 15% rule: If repair and modernization costs in the first 3 years after purchase exceed 15% of the building's acquisition cost, excluding VAT (anschaffungsnahe Herstellungskosten, § 6 (1) No. 1a EStG), they are treated as capitalizable improvements, not deductible maintenance - Larger Erhaltungsaufwand on mainly residential buildings held as private assets can optionally be spread evenly over 2 to 5 years (§ 82b EStDV) - The Instandhaltungsrücklage contribution itself is NOT tax-deductible; only actual expenditures from the reserve are deductible when the WEG incurs them ## Practical Tips - Before purchasing, always request the Protokolle (minutes) of the last 3 to 5 Eigentümerversammlungen to identify any planned or discussed major renovations (Dachsanierung, Fassadenerneuerung, Heizungstausch), as these could trigger Sonderumlagen that would seriously impact your investment return. - When renovating a recently purchased property, be careful about the 15% rule (anschaffungsnahe Herstellungskosten): if your repair and modernization spending in the first 3 years exceeds 15% of the building's acquisition cost excluding VAT, these costs lose their immediate deductibility and must be depreciated through AfA. Plan your renovation timing and budget carefully with a Steuerberater. ## Frequently Asked Questions ### Is the monthly Instandhaltungsrücklage tax-deductible for investment properties? No, the monthly Instandhaltungsrücklage contribution you pay as part of your Hausgeld is NOT directly tax-deductible. According to the official income tax handbook of the Federal Ministry of Finance, contributions to the reserve are deductible as Werbungskosten only when the money is spent on maintenance work. The deductible amount appears in the annual Hausgeldabrechnung under 'Instandhaltung' expenditures. This means the timing of the tax deduction can differ significantly from when you paid the money into the reserve. ### What happens if the building's Instandhaltungsrücklage is insufficient for needed repairs? When the Instandhaltungsrücklage does not cover a necessary repair or renovation, the WEG has two options: take a loan (WEG-Kredit) or levy a Sonderumlage (special assessment) on all owners. The decision is made by majority vote of the votes cast at the Eigentümerversammlung (§ 25 WEG). Each owner's share is typically proportional to their Miteigentumsanteil (co-ownership share). Sonderumlagen must be paid regardless of your cashflow situation and are not recoverable from tenants. A well-funded reserve reduces the risk of unexpected Sonderumlagen. ### How can I reduce Instandhaltung costs as a property investor? Several strategies help manage maintenance costs effectively. First, buy quality: newer buildings and well-maintained older buildings with documented renovation histories tend to have lower maintenance needs. Second, participate actively in WEG decisions so the building's maintenance plan is proactive rather than reactive, since preventive maintenance usually costs less than emergency repairs. Third, build relationships with reliable tradespeople (Handwerker) who offer fair prices and quality work. Fourth, for unit-level maintenance, address issues promptly before they escalate, as a small ignored leak can turn into major water damage. Finally, when renovating, choose durable, low-maintenance materials that reduce long-term costs.