German sawmilling sector welcomes federal tax incentive plans

The Federal Building Minister Klara Geywitz has proposed the introduction of a degressive depreciation allowance (deduction for wear and tear) to stimulate the construction industry and increase the willingness to invest. 

The move comes amid a slide in German house construction, with current building levels way off the target of 400,000 new homes built annually.

“We expressly welcome the initiative of the Federal Minister of Construction,” said DeSH Managing Director Julia Möbus. 

“Effective measures to support construction activity are long overdue. The introduction of a temporary degressive depreciation is therefore a first important impetus to help the construction industry out of the crisis. The high depreciation rate of seven percent in the first four years can be a ray of hope in the face of high interest rates, increased construction costs and persistent inflation.”

Ms Möbus said the number of new building permits had been falling for months - impacting the entire sector, including the sawmill and timber industry. 

Demand for lumber has plummeted and most companies are already seeing production cutbacks of up to 40%, according to the results of DeSH's half-yearly survey. 

The building minister's plans address not only private builders but also housing construction companies and the planned period of validity up to 2030 enables calculations to be made.