Maintenance reserve: how much, who owes it, and when it cuts your tax

Every sales brochure mentions it, hardly any calculation takes it seriously: the Instandhaltungsrücklage – officially the Erhaltungsrücklage, the maintenance reserve of a German condominium association. It is the item that turns an apparently profitable flat into a special levy five years later. This article shows what German law actually requires, which single statutory figure exists as an anchor, how to derive a defensible reserve per square metre from it – and when the expense genuinely reduces your tax.

What the statute requires – and what it leaves open

The German Condominium Act (Wohnungseigentumsgesetz, WEG) knows the reserve but names no figure. Under § 19 (2) no. 4 WEG, proper administration includes “die Ansammlung einer angemessenen Erhaltungsrücklage” – the accumulation of an appropriate maintenance reserve. No amount, no percentage, no formula appears in the statute. “Appropriate” is the only yardstick – and therefore a question the owners’ meeting answers afresh every year.

What the reserve is meant to cover follows from the same provision: § 19 (2) no. 2 WEG names “the proper maintenance of the common property”. And common property, under § 1 (5) WEG, is “the land and the building, in so far as they are not in individual ownership or owned by a third party” – roof, façade, staircase, pipework, heating plant, lift.

The mechanics sit in § 28 WEG: the owners resolve on the advance contributions to the reserves, the manager draws up a budget (subsection 1) and, after year end, an annual statement (subsection 2). What matters most to a buyer is subsection 4: the manager must produce an annual asset report (Vermögensbericht) containing “the balance of the reserves referred to in subsection 1 sentence 1 and a list of the material common assets”, and it must be made available to every owner. Ask for it before you buy – it answers the deferred-maintenance question faster than any viewing.

The one statutory figure: § 28 (2) II. BV

One German provision does name concrete amounts for maintenance costs: § 28 (2) of the Second Calculation Ordinance (Zweite Berechnungsverordnung, II. BV). It does not apply directly to a privately financed condominium association – under § 1 II. BV it applies where economic viability, burden or floor area are to be calculated under the Second Housing Construction Act or the Housing Commitment Act. As a benchmark it is nevertheless the best anchor available, because it grades by building age instead of guessing a flat rate.

The same provision adds corrections: for flats with a mechanically operated lift the rates increase by 1.00 €; where heat is supplied on an independent commercial basis they fall by 0.20 €; if the tenant bears the cost of minor repairs inside the flat they fall by a further 1.05 € under subsection 3. Cosmetic repairs (Schönheitsreparaturen) are not included in the rates – where the landlord bears them, subsection 4 allows at most 8.50 € per m² and year on top. For garages and similar parking spaces, subsection 5 allows at most 68 € per space and year.

The rules of thumb used in practice

Alongside the ordinance, rules of thumb circulate, above all the so-called Peters formula: construction cost per m² × 1.5 ÷ 80 gives the annual reserve per m². It has no legal basis – it is a valuation-practice convention assuming that over a service life of 80 years roughly one and a half times the construction cost flows into maintenance. As a sanity check it works; in an owners’ meeting, the age grading of the II. BV is the stronger argument.

Worked example: 78 m², ready for occupancy in 1985, with a lift

A condominium in a building from 1985 – so more than 32 years ready for occupancy at the end of 2026. A mechanically operated lift is present, the tenant bears no minor repairs, and heat is not supplied commercially.

Around 81 € a month – for a flat whose actual reserve contribution within the service charge is often 25 to 40 €. That difference is the special levy of the day after tomorrow. This is why the reserve belongs in the running calculation as a line of its own; how far it moves the result is shown in our article on calculating property cash flow.

One limitation belongs with it: under § 28 (1) II. BV the rate expressly covers no building works “in so far as they constitute modernisation or create new living space or other permanently usable space”. Energy-efficiency modernisation is therefore a separate budget – and refinanced by a different route, through the modernisation rent increase.

For tax, the payment counts – not the contribution

For the deduction of expenses, the principle of § 11 (2) sentence 1 EStG applies: “Ausgaben sind für das Kalenderjahr abzusetzen, in dem sie geleistet worden sind” – expenses are deducted for the calendar year in which they were paid. What governs is the moment of payment, not the year a sum was economically intended for. The annual statement and the asset report under § 28 (2) and (4) WEG are your evidence of when the association actually paid for which maintenance measure.

What is certain, by contrast, is the spreading option: under § 82b (1) EStDV a taxpayer may spread larger maintenance expenditure on buildings that are not business assets and are predominantly residential, by way of derogation from § 11 (2) EStG, “evenly over two to five years”. On a pro-rata maintenance expense of 12,000 € from a roof refurbishment, that means five years of 2,400 € each instead of one single deduction – at an assumed marginal tax rate of 42%, a tax effect of 1,008 € per year instead of 5,040 € at once. It pays off whenever the full deduction in one year would push your taxable income below the bracket where it still does work.

Two details from the same provision: if the building is sold during the spreading period, the portion not yet taken is deducted in the year of sale under § 82b (2) EStDV – so the remainder is not lost. And where the building is owned by several people, § 82b (3) EStDV requires the same period for all of them.

Whether a measure counts as maintenance expense at all, or instead lands in the depreciation base as production cost, is decided in the first years after purchase against a threshold of its own – see post-purchase production costs: the 15-percent threshold.

Frequently asked questions

What is the minimum maintenance reserve?

The statute names no minimum. § 19 (2) no. 4 WEG requires only an “appropriate” reserve; what is appropriate is resolved by the owners. The age grading of § 28 (2) II. BV is a sound basis for arguing it.

Do I get my share of the reserve back when I sell?

Not as a payout. The reserve belongs to the association, not to the individual owner, and passes with the flat to the buyer. A healthy balance is therefore negotiated through the purchase price – the asset report under § 28 (4) WEG supplies the figure.

Does any of this apply to a single-family house?

The WEG rules do not – without an association there is no resolved reserve. The commercial need is identical, though: roof, heating and façade age regardless of the form of ownership. The rates of § 28 (2) II. BV work just as well as a benchmark; the difference is that nobody sets the money aside for you.

Sources

• § 1 WEG (definitions, common property) — Gesetze im Internet (retrieved on 6 August 2026)
• § 19 WEG (appropriate maintenance reserve) — Gesetze im Internet (retrieved on 6 August 2026)
• § 28 WEG (budget, annual statement, asset report) — Gesetze im Internet (retrieved on 6 August 2026)
• § 1 II. BV (scope of the Second Calculation Ordinance) — Gesetze im Internet (retrieved on 6 August 2026)
• § 26 II. BV (three-yearly indexation of the amounts) — Gesetze im Internet (retrieved on 6 August 2026)
• § 28 II. BV (maintenance costs, maximum rates per m²) — Gesetze im Internet (retrieved on 6 August 2026)
• § 11 EStG (receipt and payment principle) — Gesetze im Internet (retrieved on 6 August 2026)
• § 21 EStG (income from letting and leasing) — Gesetze im Internet (retrieved on 6 August 2026)
• § 82b EStDV (larger maintenance expenditure on residential buildings) — Gesetze im Internet (retrieved on 6 August 2026)

This article provides general orientation and does not replace individual tax or legal advice within the meaning of § 3 StBerG. What governs is the wording of the law as applicable at the time, the circumstances of the individual case and advice from a qualified professional.