Minimum income threshold

The de minimis threshold is a value limit in real estate and tax law below which certain regulations are simplified or suspended entirely. In the context of condominium law, it refers to the threshold for construction projects below which the consent of all owners is not required. In the context of tax law (e.g., Section 6(2) of the Income Tax Act), it describes the threshold for the immediate full write-off of low-value assets (GWG). The exact threshold value depends on the specific legal context.

De minimis threshold in condominium law

Following the 2020 WEG reform, structural changes to common property may be decided by a simple majority if they benefit an owner who bears the costs themselves. For particularly minor measures-such as installing a charging port or small solar panels-the requirements are lowered even further. The de minimis threshold is not rigidly fixed by law but depends on the extent to which other owners are affected and the value of the measure in relation to the entire property.

Section 20(1) of the WEG is decisive: Any owner may request a structural alteration if it benefits them and the other owners are not affected beyond what is unavoidable. What “unavoidable” means depends on the specific measure. In case law, visually unobtrusive, reversible alterations (e.g., a doorbell system, a small awning) are generally considered more minor than structural alterations that permanently change the building’s appearance.

Important: Even if a measure is classified as minor, it should at least be recorded in the minutes of the owners’ meeting. Anyone acting without any documentation risks other owners subsequently challenging the measure and insisting on its removal.

Minor Expenditure Threshold for Low-Value Assets (GWG)

For landlords and real estate investors, the GWG threshold under Section 6(2) of the German Income Tax Act (EStG) is relevant: Assets (furnishings, equipment) whose net acquisition costs do not exceed 800 euros can be immediately deducted as business expenses in the year of acquisition. For amounts between 250 euros and 800 euros net, there is an option to choose between immediate deduction and pooled depreciation over five years. This allows landlords to claim tax deductions for purchases related to rental properties in a timely manner.

In practice, this means: A new washing machine costing 750 euros net is fully deductible in the year of purchase. A built-in closet costing 1,200 euros net, on the other hand, must be depreciated over its useful life (typically 10-15 years). For furnished rental properties, which are becoming increasingly common in Nuremberg, landlords should tailor purchases specifically to the low-value asset (GWG) limit to maximize the immediate tax deduction.

The GWG limit also applies to digital assets such as laptops and tablets, provided they are used exclusively for rental activities. In the year of purchase, these are fully deductible, even if the value exceeds the 800-euro limit-since 2021, a special rule with one-year depreciation has applied to purely digital assets.

De minimis threshold for land registry entries and assignments

In land registry law and with regard to land charges, the term is occasionally used for exemption clauses: A land charge creditor (bank) undertakes to release individual parcels of land or sub-plots from liability if their value exceeds the total debt by a certain minimum amount. This de minimis threshold protects the debtor from the bank making the release of small subplots disproportionately difficult.

In portfolio financing-for example, when an investor bundles several Nuremberg condominiums under a single mortgage-the release clause is a crucial element of negotiation. Without a clear de minimis provision, the bank can refuse to release a single unit from the portfolio, even if its value constitutes only a small portion of the remaining debt. We recommend explicitly addressing this clause during contract negotiations with the bank.

De minimis Threshold in the Warranty for Defects

Warranty law also includes a type of de minimis threshold: Insignificant defects do not entitle the buyer to rescind the purchase contract (Section 323(5) BGB). Case law generally sets the materiality threshold at around 5% of the purchase price. If the cost of remedying the defect is below this threshold, the buyer may demand subsequent performance or a price reduction, but not rescission of the contract. For real estate buyers, this means that even for minor defects, the costs of remedying them should be carefully documented to safeguard all warranty claims.

Practical Tip for Property Owners in Nuremberg and Franconia

For landlords in Nuremberg who furnish rental apartments or equip them with appliances, it is advisable to keep purchases specifically below the GWG threshold of 800 euros net to take advantage of the immediate tax deduction. For WEG projects in Nuremberg residential complexes-especially in larger complexes from the 1970s, such as in Langwasser or Schweinau-we recommend always seeking a WEG resolution if there is any doubt regarding the minor nature of a measure. This establishes a clear timeframe for challenges and protects against later demands for restoration by co-owners.

When assessing defects in a property being purchased, buyers should also consult an expert who can provide a reliable estimate of the costs to remedy the defects-this is the only way to determine whether a defect exceeds the materiality threshold for withdrawing from the purchase contract.

Frequently Asked Questions

Does the €800 GWG limit also apply to landlords?

Yes. The GWG limit applies to all income from renting and leasing (Section 21 EStG), provided the purchase serves the rental property. The relevant figure is the net acquisition cost excluding VAT, unless there is a right to deduct input tax.

Do minor WEG measures need to be documented?

Yes. Even if a measure is considered minor, it is advisable to document it in the owners’ meeting or at least reach a written agreement to avoid future disputes. Without documentation, a co-owner can demand removal at any time.

What happens if I exceed the de minimis threshold and still proceed without a resolution?

Other owners can demand that the work be stopped or reversed. In the worst case, claims for damages may arise. Regarding tax thresholds, the tax office may retroactively deny immediate depreciation and require capitalization with regular depreciation.

At what point is a construction defect considered significant enough to justify rescission?

In case law, a defect is generally classified as significant if the cost of remedying it exceeds 5% of the purchase price. For a purchase price of 400,000 euros, that would be a threshold of 20,000 euros. Below this threshold, a reduction in price or subsequent performance is possible, but not withdrawal from the contract.

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