Monument Protection: How Historic Architecture Makes Its Way into the Modern Era

Standing in awe and admiration in front of a castle rebuilt according to historical models and feeling the spirit of the past, or strolling through a lively old town and admiring the charm of proud merchants' houses from the times of the Hanseatic League - this is something we have probably all experienced at least once.

All of this is made possible by the actors' willingness and associated commitment to preserve culturally and historically significant buildings for posterity. The preservation of historical monuments is critical in this area. It ensures that the framework conditions for the protection of architectural cultural assets are followed, as outlined in the law for the protection of historic buildings and monuments and administered by the monument construction and protection authority.

The most important criterion for obtaining "listed building" status is a compelling public interest. Age alone is not determinative. The designation protects the structure from demolition and structural changes. In Germany, for example, the definition and implementation of individual measures are the responsibility of the individual federal states. Other countries, including Spain, Portugal, Italy, and France, as well as the United States, have their own rules that may differ.

Hamburg, Germany – Purchasing a listed property has benefits and drawbacks. Our new blog post contains the most important information and facts!

The significance of monument protection for the real estate market

Castles, fortresses, and monasteries, old manor houses and half-timbered houses, windmills and water towers, and epochal residential or commercial buildings are frequently subject to monument protection. Anyone considering purchasing such a structure should educate themselves on the risks involved. This is due to the fact that protection is associated with a variety of requirements and regulations regarding renovation and use, but also with intriguing tax opportunities and benefits. The purchase is also subject to a maintenance obligation, which can be enforced by the municipal monument protection authority.

What monument protection means for renovation measures

Without official permission, no renovation, modernisation, extension, or conversion work may be carried out on listed buildings. The building's appearance and historical design must be preserved. The specifications are very specific and specify the building materials and colors to be used, as well as the craftsmanship techniques. This frequently necessitates the use of specialized craftsmen to complete the work professionally.

Similar regulations apply to the exterior area surrounding the building, and any planned alterations must also be approved by the monument protection authority. Interior design guidelines exist as well, but they are not as stringent. However, the alterations may not change the building's character.

Listed properties are exceptions when it comes to energy-related renovations. They do not require an energy certificate and are exempt from the Energy Saving Ordinance's regulations. It should be noted that this may result in higher maintenance costs.

Tax incentives for investors and private users

The purchase of a listed property can be motivated by a number of factors. One possible reason could be the desire to own a truly special, one-of-a-kind building and renovate it to its former glory. Passion and idealism, as well as financial resources, play a role here. However, investors are also looking for these unique properties in desirable locations in order to profitably rent them out after refurbishment.

The state rewards the costs of historical restoration architecture a listed property, which are often significantly higher than normal renovations, with sometimes significant tax breaks. Anyone who invests in property renovation in order to rent it out can deduct the costs over a twelve-year period as income-related expenses. In this manner, the tax benefits can be used to completely recoup the maintenance costs.

If the new owner intends to live in the listed property, he or she can deduct 9 percent of the renovation and maintenance costs over a ten-year period. In the end, that represents 90% of the investment.

In addition, the acquisition costs of all rental properties can be deducted with different depreciation periods depending on the year of construction.

Can the purchase of a listed property be worthwhile?

The tax breaks described above are appealing to both buyers and investors. Anyone looking to resell the refurbished property at a profit after only a short period of time, on the other hand, should proceed with caution. Because the next buyer will not be able to take advantage of the tax breaks, he will be forced to sell at a loss. To avoid this, the property should be held for a minimum of fifteen years.

In most cases, listed rental properties have a high level of appeal. As a result, higher rental income is possible in the right location. The demand for living space in desirable cities remains high, and the chances of finding solvent tenants looking for something unique are good.

Listed houses are also frequently found in structurally deficient areas. Despite the value stability, a profitable sale is difficult to achieve due to the low house and land prices. The expected increase in value in economically more appealing locations will most likely not occur here as well.

Can monument protection be revoked?

The status of a listed building is not permanent. If the original reasons for the listing are no longer valid, or if the cost of maintaining the building is prohibitively expensive, the owner may apply for revocation. Following a review of the circumstances, the decision is made by the monument protection authority.