BERLIN (dpa-AFX) - The German government wants to provide more affordable rental housing with a tax relief. The aim is to motivate socially oriented companies to offer affordable housing on a permanent basis. A corresponding regulation was launched by the cabinet on Wednesday. It will now be debated in the Bundestag next. However, tenants' representatives are already expressing doubts that the plan will work.

Building Minister Klara Geywitz (SPD) spoke of a good day for all tenants. "With the new non-profit housing scheme, we are creating another strong pillar for more affordable housing in our country alongside social housing," she emphasized. The so-called Wohngemeinnützigkeit is not a new instrument, but it was abolished in Germany in 1990. The SPD, Greens and FDP had planned to reactivate it in the coalition agreement.

Which tenants should move into the apartments

The target group are tenants who are no longer able to afford an apartment at the rent that is now standard in many areas. Specifically, the affordable apartments are to be rented primarily to people whose income is no more than five times the standard rate of social assistance (563 euros). Single parents are allowed to earn slightly more, namely six times the social welfare rate. This income limit is only checked once when the tenancy agreement is signed. The federal government assumes that a total of around 105,000 tenants will benefit from the scheme - up to 60 percent of households in Germany.

What requirements apply to providers

The non-profit housing scheme is aimed at socially oriented companies, associations and foundations. If they provide affordable housing, they will benefit from the tax relief of non-profit status in future. To do so, the rent offered must be below market prices. The apartments must remain affordable in the long term - unlike social housing, which is no longer price-fixed after a certain period of time. The federal government expects around 100 companies to participate.

What exactly will be changed

The provision of affordable housing is to be officially classified as "non-profit" in Section 52 of the non-profit law - just like, for example, youth and elderly care or monument and nature conservation. This is automatically associated with tax advantages. This should make it financially attractive for socially oriented companies to rent out apartments. The federal government also wants to give companies more leeway in terms of reserves so that they can save money for larger investments such as construction projects and renovations.

What this means financially

Depending on how much tax they currently pay, the new regulation could save companies between one and two thousand euros per apartment per year, according to estimates by the federal government. A company with 300 apartments could therefore save around half a million euros per year. Companies are required to invest any surpluses in the construction, purchase and modernization of housing.

What the economy thinks

The tenants' association strongly doubts that the concept will actually lead to more and permanently affordable housing. According to President Lukas Siebenkotten, the coalition agreement lacks investment subsidies. "According to experts, this will only help companies that are already non-profit.

Although the housing industry sees tax relief as a sensible addition in the fight against the housing shortage, it appealed to the government to set up a broader system of subsidies. According to the industry association GdW, there is now a shortage of 800,000 apartments. In view of the current crisis, companies must first be put in a position to build again. In view of the permanently higher interest rates and simultaneously rising costs, this can only be achieved through a short-term interest rate program./tam/DP/men