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PROTECTED BUILDINGS AND

REDEVELOPMENT AREAS IN
GERMANY-
AN OWNERS GUDE
POST: PHONE:
MY GERMAN PROPERTY LIMITED USA TOLL FREE: 1855-810-6781
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LONDON, ENGLAND EC1V 2NX EMAIL:
OR:
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A MY GERMAN PROPERTY FACTSHEET
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MY GERMAN PROPERTY LTD, ITS DIRECTORS AND AGENTS PROVIDE THIS INFORMATION MERELY A BRIEF
INTRODUCTION FOR INDIVIDUAL INVESTORS HOLDING PROPERTY THAT IS CLASSED AS DENKMALSCHUTZ
OR LOCATED IN A REDEVELOPMENT AREA IN GERMANY PURELY FOR INFORMATIONAL PURPOSES
RESTRICTIONS ON NEW CONSTRUCTIONS AND MODERNISATIONS OCCUR IN ALMOST ALL COUNTRIES AND
NUMEROUS REGULATIONS APPLY IN GERMANY. IT IS IMPOSSIBLE TO COVER ALL THE COMPLICATED
REGULATIONS IN ONE DOCUMENT.
IT IS STRONGLY ENCOURAGED THAT RELEVANT LOCAL AUTHORITIES, ARCHITECTS AND BUILDING
REGULATION DEPARTMENTS ARE CONTACTED BEFORE UNDERTAKING ANY PURCHASE OR WORK AND THAT
THIS GUIDE IS NOT TAKEN AS A COMPREHENSIVE LIST OF REGULATIONS APPLYING TO PROPERTY LAW IN
GERMANY.
ATHOUGH THIS PUBLICATION OUTLINES REGULATIONS REGARDING THE PROTECTION OF HISTORICAL
BUILDINGS, RESTORATION LAW AND PRESERVATION STATUTES AND DESCRIBES COMPENSATORY SUBSIDIES
AVAILABLE IN THE FORM OF TAX BENEFITS AND/OR GRANTS, MY GERMAN PROPERTY LTD CANNOT
GUARANTEE THE APPLICATION OF THOSE LAWS OR GRANTS BY THE LOCAL AUTHORITY OR GERMAN STATE.
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*****DISCLAIMER*****
Germany is a country that is a contradiction in terms. It is classed as a fully westernized and first world country, yet
at the same time struggling to repair the damage to its reputation and infrastructure of 2 world wars and a
division between eastern and western mentality and management.
If you are purchasing a property in Germany, especially an investment property that requires renovation, there is a
high chance that it could be either a protected building. According to data, the number of so called monuments
in Germany varies between 850,000 and 1.2 million predominantly private properties, which corresponds to
57% of all buildings in the country. The numbers differ because German states use different classifications for what
is a monument so it is not entirely clear how many are actually livable properties on the extensive registry.
o jur
What makes a building a protected monument?
While divergent in detail, the state laws on monument protection specify describes denkmalschutz property as
assets for which the preservation and use of, are in the public interest.
Furthermore, clarification of the significance of previous achievements for the present day and expression of the
wealth and diversity of European culture are also viewed as objectives.
Aesthetics, artistic dimensions and visible traces of former uses thus play an important role in the selection process.
However, authorities claim that more prominent locations or higher market values do not influence their decisions.
If your property calls into one of these categories, then you should take an interest in the state and federal law
regarding protected properties, which will describe what measures and responsibilities you have as an owner, plus
give you a chance to research possible grants and tax benefits as the owner of a historic property in Germany .
INTRODUCTION
It is making huge efforts to bring its infrastructure and historic properties up to the same standard as its neighbours.
There are literally billions of Euros every month being spent on renovation and repair; roads, schools, hospitals, plus
private sector buildings are all finding themselves the focus of the great German desire to present a clean and
modern vision to both itself and to the outside world.
This requirement applies when the protected assets are crucial to the history of mankind, cities and settlements, or
for the development of working and production conditions, plus when there are historical, artistic, scientific,
ethnological or urban design reasons for their preservation and use .
The recording of historical properties has largely been completed, even though modern buildings will gradually be
listed as they reach the typical age limit of 2530 years. Currently, only some of the Ln
ps e and therefore are listed automatically. Hence, owners and investors are
increasingly confronted with administrative preservation requirements applied unexpectedly by the soaring
inclusion of modern buildings in listings.
der in Germany apply
formalised proceedings for registration of protected monuments and the rest provide an informal and solely infor
mative listing only. In the latter case, objects that meet the legal definitions of cultural monuments are deemed
worthy of preservation i
Who should I contact to find out if my property is listed?
Firstly when you were sold your property it should have been clearly stated if the property was considered to be
under protection, or Denkmalschutz. It will be in your deed, and the presiding Notar will be able to clearly answer
this question.
What are the real world pros and cons of owning a listed building that I should consider?
The primary legal consequence to consider about owning a listed building, is that the owner has an obligation to
preserve and maintain the property. This means you cannot allow it to fall into disrepair. If you are purchasing a
property that is listed and already in such a state, it is possible that you will be expected to immediately rectify any
serious defects. This of course can also mean the ability to acquire a fantastic building at a bargain price from an
owner who does not have the resources to undertake such repairs.
A secondary consideration is that specific permits under the monument protection laws for modifications, removals,
repairs, restorations and modified uses may be required. If repairs are initiated without the requisite permits, an
injunction may be issued against the owner to cease repair/renovations until the permits are obtained.
The implications of ignoring the rules or allowing a property to fall into disrepair is that an injunction may be issued
with an order to take specific repair or maintenance measures required. If when in receipt of an injunction an
owner fails to comply, the repair can be undertaken by the authority, in which case the recipient is held responsible
for the resulting repair costs AND legal fees, which usually amount to a lot higher than a local builder could have
been acquired in the first place.
In the event of extreme apathy, expropriations are also possible, although such cases are rare.
The only essential preservation requirements that can be enforced is the general necessity of the public interest IE
that the property does not degrade to an unsafe condition where restoration in the future would be impossible and
the monument has irreparable damage. So any cases of roof leakage, dry rot, subsidence or structural insecurity
should be viewed as a potential conflict with the relevant preservation authorities.
Who is in charge of enforcing the protection law?
Your local city council, or in the case of rural property, the county, act as lower conservation authorities and are
the first point of contact for investors and owners. They check and verify whether the expected expenditure for
preservation and repair requires grants and subsidies from federal funds are available.
Jurisdiction over preservation matters is regulated in the monument protection laws of the various states, with the
top protection authority being the responsible ministry; each of the states has a Monument Protection Office, which
acts as the central authority. A comprehensive list of the state protection laws, is contained on the last page of this
booklet.
QUESTIONS ANY OWNER SHOULD ASK
Apart from the pride of owning a piece o history, most owners are pleased to hear that when undertaking
restoration work on a listed building, as long as they are undertaken in accordance with the local regulations, most
are eligible for tax deductions and financial assistance in the form of loans and subsidies.
The number of funding opportunities in the field of heritage protection is so extensive that only an overview can be
given. There are many advisory firms in Germany that advise on stdtebaulicher Denkmalschutz and guide
investors through the process of acquiring these loans and grants. An internet search is recommended to find these
companies, or My German property can assist clients purchasing properties through us to engage with these firms.
In many states, depending on the importance of the building, the urgency of action to be performed and the
expected tax benefits, subsidies and loans can be granted. If a property is also located in a redevelopment area
(Sanierungsgebiete), funds can be allocated as part of the Urban Development programme Stdte-
baufrderung. This is a federally funded program. More information on redevelopment areas and legislation
pertaining to them is contained on the next page.
COMMON GRANT AND LOAN PROGRAMS:
Landwirtschafts-, Dorferneuerungs- und Wirtschaftsfrderungsprogramme. (agricultural, village renewal and
economic development)
The Program for the conservation of cultural monuments of national importance- Programm zur Erhaltung von
Kulturdenkmlern von nationaler Bedeutung
This program deals with larger listed buildings of extreme national importance. Over 500 cultural grants totaling
347 million euros have allowed over 100 nationally significant historic buildings can be preserved and restored in
the East and the West from further deterioration.
Special Program BKM Sonderprogramm zur Frderung von Baudenkmalen
the German Bundestag has provided 40 million for a conservation area special program since 2007 . The Office
promotes the BKM so throughout Germany for urgent work on Substanzsicherungs and restoration of valuable
monuments in smaller cities and towns, which form an integral part of the cultural heritage in Germany.
A total of 284 renovations have been funded by the BKM. These federal funds, which are supplemented in the
same amount by the states, municipalities and owners, are not only an important contribution to the conservation
area, but are mainly focused on small and medium-sized constructions, putting them in the reach of normal
property owners. Also a recent economic stimulus package to benefit significant Grade II listed buildings in
Germany has been launched.
Quite often, such grants are not as important for investment decisions as the possibility of obtaining tax benefits
with respect to inheritance, gift and property taxes, particularly in connection with income tax under sections 7i and
11b of the Income Tax Act (EStG) (regarding real estate leased to a third party) and under sections 10f (for owner-
occupied real estate) and 10g (for real estate that is used neither for income purposes nor for the owner's own
residential purposes).
The owner/investor can claim increased deductions for the historical costs from the time that work is completed,
provided that before work commenced agreement was reached on costs with the competent conservation
authority, however the purchase price and ancillary and financing costs cannot be deducted.
GRANTS LOANS & TAX INCENTIVES FOR REDVELOPMENT
One law that may affect your property is the urban redevelopment law. This is covered in 136164b of the
Baugesetzbuch (Building Code), or BauGB.
On purchase of a property or during its offering, you should have been informed if the property is located in a
Sanierungsgebiet, or redevelopment area, and who the local redevelopment agency, or Sanierungstrger, is.
If your property is NOT in a redevelopment area then you can disregard this page.
In the states of former West Germany, redevelopment areas have been set up in many cities and villages since 1960,
particularly in old towns and city centres. In the states of the former East Germany, most old towns and city centres
have been designated as redevelopment areas since 1991.
According to BauGB section 136, such redevelopment measures should benefit the general public by reducing urban
design nuisances. According to BauGB section136 IV 3, public and private interests must be weighed up.
The second major point of BauGB sections 153 ff. is the 'development costs'. This is a payment made by owners of
properties in the redevelopment area for any redevelopment-related increases in land value.
This also applies to owners whose properties are not redeveloped directly, but who may potentially experience an
increase in value as a result of measures taken in the redevelopment area. These charges can be anywhere from a
few hundred euros to almost ten thousand depending on the property in question.
The increased write-offs can be applied to costs for construction, modernization and repair, as well as to measures
related to the conservation, restoration and functional use of buildings. Conservation expenditure can also be
spread across up to 5 years if the requirements under EStG section 7h are met.
It should be remembered that the redevelopment authorities have considerable discretionary leeway when it
comes to applying the charges. If you have difficulty in paying them or it would impact your ability to repair your
property they will most likley NOT charge the fee provided you undertake the work. Talking to the agencies in
question and keeping good communication is key to successfully developing and maintaining a property in one of
the redevelopment areas.
SANIERUNGSRECHT (REDVELOPMENT LAW)
Once a redevelopment area has been designated officially, these measures are subject to comprehensive disposition
and development restraints under BauGB section 144. All projects conducted without legal redevelopment
approval are at risk of being stopped by the building control authority. According to BauGB section 144 III, all
intended projects and legal transactions (including divisions) are subject to approval.
A major point to note is that even the purchase and sales contract for real estates in a redevelopment area is
subject to inspection. If, after examination of the cost and financial overview to be submitted under BauGB section
149, the authority concludes that the investment property has been purchased at such a high price that restoration
is compromised for financial reasons, the purchase may be blocked. This means that you can actually be forced to
sell the property for a cheap price to allow the new owner funds to do the reconsturction work.
It is important to note that as draconian as this rule sounds, it is not so drastic as may be first imagined. As a rule,
the value increase of the property due to the redevelopment is already factored into the purchase price when a
property is sold. And charges stemming from redevelopment that may be hard to anticipate in some cases are
offset by public grants under BauGB section 137. Thus, affected parties may be advised, supported or, if necessary,
aided financially during the implementation of the redevelopment.
As in the area of monument protection, EStG sections 7h, 10f and 11a also provide for tax breaks for investors and
owners, according to which the costs for measures to be taken can be claimed as deductible expenditure. Section 7h
is subject to similar regulations as section 7i for monuments. In the year of construction and for the next 7 years
af ter, it is possible to claim increased deductions of 9% of the construction costs, and then 7% in each of the
subsequent 4 years.
LEGAL REFERENCES
POST: PHONE:
MY GERMAN PROPERTY LIMITED USA TOLL FREE: 1855-810-6781
CAPITAL OFFICE, KEMP HOUSE 152-160, UK: (+44) 020 376 91179
LONDON, ENGLAND EC1V 2NX EMAIL:
OR:
MY GERMAN PROPERTY LIMITED ENQUIRIES@MYGERMANPROPERTY.EU
BORSIGSTRASSE 9, 10115, BERLIN GERMANY
ON THE WEB: FACEBOOK:
WWW.MYGERMANPROPERTY.EU FACEBOOK.COM/MYGERMANPROPERTY
LAWS BY STATTE:
Baden-Wrttemberg: Law for the Protection of Cultural Monuments (Monument Protection Act - DSchG BW)
Bavaria: Law on the Protection and Preservation of Monuments (Monument Protection Act - DSchG)
Berlin: Law on the Protection of monuments in Berlin (Berlin Monument Conservation Act - DSchG Bln)
Brandenburg: Law on the protection and care of the monuments in the state of Brandenburg (BbgDSchG)
Bremen: law for the care and protection of cultural monuments (Denkmalschutzgesetz Bremen) [7]
Hamburg: conservation law of 5 April 2013 (DSchG) [8]
Hesse: Law for the Protection of Cultural Monuments (Monument Protection Act)
Mecklenburg-Vorpommern: Law for the protection and care of monuments in the country Mecklenburg-
Vorpommern (MV DSchG)
Lower Saxony: Lower Saxony Monument Protection Act (NDSchG)
North Rhine-Westphalia: Law on the Protection and Preservation of Monuments in the land of North Rhine-
Westphalia
Rhineland-Palatinate: State Law for the Protection of Cultural Monuments (DSchG)
Saarland Saarland Monument Protection Act (SDSchG)
Saxony: Act on the Protection and Care of Historic Monuments in Saxony (Saxon Denkmalschutzgesetz -
SchsDSchG )
Saxony-Anhalt: conservation law of the State of Saxony-Anhalt
Schleswig-Holstein: Law for the Protection of Cultural Monuments in Schleswig-Holstein (Denkmalschutzgesetz -
DSchG)
Thuringia: Thuringian law for the care and protection of cultural monuments (ThrDSchG)