Germany Mortgage Interest Deduction — Does It Exist?
Germany has no mortgage interest deduction for primary residences. Learn why, what options exist for rental properties, and how Germany compares to other countries.
No mortgage interest deduction for primary residences in Germany
There is no tax benefit to calculate. See the notes below for details.
- •No deduction for primary residence: mortgage interest (Schuldzinsen) on an owner-occupied home is not deductible from German income tax. There is no equivalent of the Dutch or US mortgage interest deduction.
- •Rental properties: mortgage interest IS deductible as Werbungskosten against rental income (§20/§21 EStG) — but only for investment, not the home you live in.
- •The Eigenheimzulage (home ownership subsidy) was abolished in 2006. Germany's tax code intentionally does not privilege owner-occupiers in this way.
Germany: No Mortgage Interest Deduction for Primary Residences
Germany does not allow homeowners to deduct mortgage interest (Schuldzinsen) on their primary residence from income tax. There is no equivalent of the Dutch hypotheekrenteaftrek or the US Schedule A deduction.
This is a deliberate policy choice: German tax law treats owner-occupied housing as private consumption, not an income-generating asset. The Eigenheimzulage (home ownership grant) was abolished in 2006.
What Is Deductible
- Rental properties: mortgage interest is fully deductible as Werbungskosten (income-related expenses) against rental income under §21 EStG
- Home office: a portion of mortgage interest may be deductible if part of the home is used exclusively for business
- Energy renovation: some credits available under the BEG (Federal Funding for Efficient Buildings) program for qualifying renovation measures
How Germany Compares
Among major European economies, Germany stands out for its lack of primary residence mortgage interest relief. The Netherlands (36.97%), Norway (22%), Denmark (25.1%), and Sweden (30%/21%) all offer meaningful deductions. This contributes to Germany having one of the lowest homeownership rates in Western Europe (~46%).
Frequently Asked Questions
Will Germany ever introduce a mortgage interest deduction?
There are periodic political discussions, but no current legislation planned. Germany's housing policy has historically favored rental market stability over homeownership incentives.
Is BeastyTax free?
Yes, completely free — no account, no hidden costs.