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How to calculate the furnishing surcharge in Germany

Find out more about the two most common models for calculating the furnishing surcharge - the Hamburg model and the Berlin model.
Couple furnishing an apartment and carrying an armchair in the living room.

In order to turn your empty apartment into a place where your tenants can immediately feel at home, you as a landlord should invest in completely furnishing and equipping the apartment. When determining the rent, you can take the costs incurred into account in the form of a furnishing surcharge. The furnishing surcharge is a fair component of the rent for temporary furnished accommodation and serves to recognize both the original value and the wear and tear of the furniture.

In this article, we explain how you, as a landlord, can determine the furnishing surcharge for your furnished temporary rental apartment in Germany. We will present the two most common models for calculating the furnishing surcharge – the Hamburg model and the Berlin model.

 

Things to know about the furnishing surcharge

Which expenses count towards the furnishing surcharge?

Currently, the law does not clearly define when an apartment is considered furnished or which furnishings fall under the term furnishing. Therefore, whether and which household items count as furnishing and can be taken into account in the calculation of the furnishing surcharge is not laid out by law.

A rule of thumb says: If more than half of the furnishings required for running a household are provided by the landlord, the apartment is considered furnished.

We recommend that landlords on our platform consider all items that are rented in addition to the living space and are used for living purposes when calculating the furnishing surcharge. If you are unsure about the furnishing of your furnished apartment, you can get inspiration from our article 5 tips for the ideal furnishing of your temporary furnished apartment.

Two ways to calculate the furnishing surcharge: The Hamburg model and the Berlin model

There is currently no legally prescribed method for calculating the furnishing surcharge either. There is therefore no absolutely correct answer to the question we are often asked: How high can I set the furnishing surcharge for my apartment?

However, there are several models for calculating it that can offer you some guidance. One model can provide a rough estimate, especially if you are preparing an apartment for furnished letting for the first time.

The Hamburg model and the Berlin model are the two most common models for calculating the furnishing surcharge for furnished apartments. Both models calculate the monthly furnishing surcharge based on the original purchase price of the furnishings and result in calculated surcharges of similar amounts. Basically, the better the quality and newer the furniture, the higher the furnishing surcharge. Below we describe the two models in detail.

The Hamburg Model

According to the so-called Hamburg model, the monthly furnishing surcharge is made up of two components:

  • Depreciation of the furnishings (i.e. the reduction in value)
  • Interest on capital (interest on the purchase price of the furnishing)

 

Below we explain how to calculate these two components and finally how this determines the monthly furnishing surcharge according to the Hamburg model.

Depreciation of the furnishing: Declining depreciation

The age of the purchased furniture and the wear and tear caused by everyday use reduce the value of the furniture. This reduction in value is called depreciation. Depreciation is always stated per year and can be calculated either on a straight-line or declining-balance basis. In the Hamburg model, the declining-balance method of depreciation is normally used. The model uses a depreciation period of seven years. The model therefore assumes that the furniture cannot lose any more value after seven years. The depreciation period is determined by the model and is not variable.

The declining balance depreciation is based on the current value of the furniture. This current value decreases year by year. The declining-balance depreciation assumes an annual decrease in the value of the furnishings by 15%.

To calculate the declining balance depreciation, the current value is multiplied by the depreciation percentage – i.e. 15%. In the first year, the original purchase price of the furniture is taken as the initial value. As the current value of the furniture decreases from year to year, the 15 % depreciation is calculated each year on the current value of the previous year.

The model stipulates that the furniture is still worth 30% of the original purchase price after a period of seven years of use. This so-called residual time value remains constant from the seventh year of use onwards. The model, therefore, states that the furniture will never be worth less than 30% of its purchase price.

For clarification, here is an example of a declining balance depreciation calculation for an acquisition value of €10,000 for furniture:

Depreciation (€/year) = Current value of the previous year * Percentage of depreciation (as a decimal number)

  • Ex. year 1: 10,000 * 0.15 = 1,500
    In year one, the original value of the furniture is reduced by 15%. The depreciation is, therefore, €1,500. The furniture is now worth €8,500.
  • Ex. year 2: 8,500 * 0.15 = 1,275
    In year 2, the current value of the furniture is reduced by 15% again. The depreciation is €1,275 and the furniture is now worth €7,225.
  • Ex. year 3: 7,225 * 0.15= 1,083.75
    In year three, the current value of the furniture is reduced again by 15%. The depreciation is then €1,083.75 and the furniture is now worth €6,141.25.

 

To make it easier for you to understand the progression of declining-balance depreciation over a period of 10 years, we have illustrated the complete calculation from our example in table form (see below). Since according to the Hamburg model the furniture is still worth 30% of its purchase price after the seventh year and cannot lose further value, the current value of the furniture in our example is a constant €3,000 after the seventh year.  Depreciation is then reduced to €0. From the eighth year onwards, the current value of the furniture is no longer calculated using the declining-balance method of depreciation but is set at 30% of the original purchase price. In our example calculation, this explains the reduction of the current value from year seven to year eight by €205.73.

Declining depreciation with an original value of the furnishings of €10,000 (annual depreciation by 15% of the purchase price)
Year Depreciation per year Current value of the furniture
0 € 0.00 € 10,000.00
1 € 1,500.00 € 8,500.00
2 € 1,275.00 € 7,225.00
3 € 1,083.75 € 6,141.25
4 € 921.19 € 5,220.00
5 € 783.00 € 4,437.00
6 € 665.55 € 3,771.45
7 € 565.72 € 3,205.73
8 € 0.00 € 3,000.00
9 € 0.00 € 3,000.00
10 € 0.00 € 3,000.00
Total depreciated: € 6,794.21  

The interest on capital

In addition to depreciation, the Hamburg model also takes into account the interest on the money that was originally invested in the furniture: The interest on capital. This is added to the depreciation at the end.

The annual interest on capital in euros is calculated by multiplying the current value of the furniture by an interest rate. In this way, the furnishing surcharge is calculated according to the Hamburg model.

Current case law on the amount of this interest rate states that interest may be charged at 12% up to a maximum of 15%. In our example below, we calculate 12%.

The interest on capital refers – like the declining balance depreciation – to a period of use of seven years and then also provides for a residual value of the furnishings amounting to 30% of the original purchase price.

The corresponding calculation for the interest on capital is:

Interest on capital = current value of the previous year * interest rate (% as a decimal number)

  • Ex. year 1: €10,000 * 0.12 = €1,200
  • Ex. year 2: €8,500 * 0.12 = €1,020
  • Ex. year 3: €7,225  * 0.12 = €867

 

Calculation of the monthly furnishing surcharge according to the Hamburg model

To calculate the actual furnishing surcharge according to the Hamburg model, the depreciation and the interest on capital are added together. This value is then divided by twelve to get the monthly furnishing surcharge.

Monthly furnishing surcharge = (depreciation + interest on capital) / 12

After the furniture has been fully depreciated, i.e. after seven years, the interest on capital can still be calculated on the remaining current value of the furniture (30% of the purchase price).

The corresponding calculation for this is:

Interest on capital after complete depreciation = (purchase price * 0.3) * interest value (% as decimal number)

  • Example: (€10,000 * 0.3) * 0.12 = €360 (per year)

 

To calculate the monthly furnishing surcharge after the seventh year, the result still has to be divided by twelve months. This results in a monthly supplement of €30.

In the following table, we once again illustrate the entire calculation of the furnishing surcharge according to the Hamburg model with declining-balance depreciation. The original purchase price of the furniture in our example is €10,000.

Calculation of the furnishing surcharge according to the Hamburg model

Year Depreciation Current value of the furniture Interest on capital Furnishing surcharge (depreciation + interest on capital)
  per year   per year per year per month
0 € 0.00 € 10,000.00 € 0.00 € 0.00 € 0.00
1 € 1,500.00 € 8,500.00 € 1,020.00 € 2,520.00 € 210.00
2 € 1,275.00 € 7,225.00 € 867.00 € 2,142.00 € 178.50
3 € 1,083.75 € 6,141.25 € 736.92 € 1,820.67 € 151.72
4 € 921.19 € 5,220.00 € 626.40 € 1,547.59 € 128.97
5 € 783.00 € 4,437.00 € 532.44 € 1,315.44 € 109.62
6 € 665.55 € 3,771.45 € 452.52 € 1,118.07 € 93.17
7 € 565.72 € 3,205.73 € 384.72 € 950.44 € 79.20
8 € 0.00 € 3,000.00 € 360.00 € 360.00 € 30.00
9 € 0.00 € 3,000.00 € 360.00 € 360.00 € 30.00
10 € 0.00 € 3,000.00 € 360.00 € 360.00 € 30.00

The Berlin Model

The Berlin model originates from a ruling of the Berlin Regional Court in 2003. Compared to the Hamburg model, the calculation of the monthly furnishing surcharge is somewhat simpler because it is calculated on the basis of a single component: The straight-line depreciation amounting to 2% of the current value of the furniture.

This model, therefore, assumes that the value of purchased furniture decreases by 2% per year. This depreciation of 2% of the new value of the furniture is fixed by the model and is not variable. The same applies to the depreciation period – according to the Berlin model this is always ten years.

The straight-line depreciation

Straight-line depreciation is based on the original purchase price of the furniture. It is assumed that the value of the purchase price decreases annually by a fixed percentage. This reduction in value remains constant each year in the case of linear (i.e. straight-line) depreciation. In the context of the Berlin model, a linear decrease in value of 2% is calculated.

Calculation of the monthly furnishing surcharge according to the Berlin model

Important for the calculation of the furnishing surcharge according to the Berlin model is the residual value. This is calculated from the number of years that have not passed until full depreciation (according to the model: 10 years). The residual time value indicates the value of the furniture at that time. According to this model, no further furnishing surcharge may be charged after the furniture has been fully depreciated – i.e. after ten years.

The formula for calculating the monthly furnishing surcharge according to the Berlin model is as follows:

Monthly furnishing surcharge = (new value of furniture / 10 years * number of years not passed) * percentage of depreciation 2% (as decimal figure)

  • Ex. year 1: (€10,000  / 10 * 9) * 0.02 = €180
  • Ex. year 2: (€10,000  / 10 * 8) * 0.02 = €160 

 

In the following table, we illustrate the amount of the monthly furnishing surcharge according to the Berlin model for the first three years from purchase, the seventh year and the period after the depreciation period of ten years. The original purchase price of the furnishing in the example is € 10,000.

  Year 0 Year 1 Year 2 Year 7 Year 10
Investment in furnishings € 10,000.00 € 10,000.00 € 10,000.00 € 10,000.00 € 10,000.00
Depreciation period 10 Years 10 Years 10 Years 10 Years 10 Years
Depreciation 2% of the investment 2% of the investment 2% of the investment 2% of the investment 2% of the investment
Number of years not passed 10 9 8 3 0
Amount already written off € 0.00 € 1,000.00 € 2,000.00 € 7,000.00 € 10,000.00
Residual value € 10,000.00 € 9,000.00 € 8,000.00 € 3,000.00 € 0.00
Furnishing surcharge per month 200.00 € 180.00 160.00 60.00 0.00

New furniture, new rental price?

When new pieces of furniture are purchased or furniture is replaced, the calculation of the furnishing surcharge can quickly become confusing. This is because the calculation is based on the current value of the furniture and this changes with every repair. If you, as the landlord, buy a new sofa bed, for example, the total value of the furniture changes accordingly. According to the basic principle of both models, a new calculation of the furnishing surcharge should be made.

New tenants, new rental price?

Both the Hamburg model and the Berlin model provide for a recalculation of the furnishing surcharge when there is a change of tenant as a result of continuing depreciation in value. This means that you should recalculate the furnishing surcharge when new tenants move in. The models recommend that this monthly furnishing surcharge remains constant for the duration of the tenancy and until the next change of tenancy.

Which model should you use?

Which of the two models you would like to use for guidance is entirely up to you. Both models have their advantages. While the Hamburg model looks more closely at the current value of the furniture by taking into account the interest on capital, the Berlin model uses a simpler calculation. There are also differences in the assessment of the loss of value: the Hamburg model assumes that the furniture is still worth 30 % of its purchase price after seven years and cannot lose further value. The Berlin model, on the other hand, assumes a complete loss of value after 10 years.

We are aware that the calculations using both models may seem complicated at first glance. However, in our opinion, both models are well suited as a basis for calculating the furnishing surcharge. We advise you to look into the topic, as the furnishing surcharge is an important component of temporary furnished renting. Due to the wear and tear on the furniture from daily use, this should be a fair component of the rental price.

You can find more information when renting out furnished on a temporary basis: All you need to know about the legal situation in our article.

If you rent out your temporary furnished apartment with Wunderflats, we will be happy to advise you. As the market leader in temporary furnished accommodation in Germany, we have gathered years of experience with rental comparison data. We use this experience to develop our own analysis tools, which we can use to determine your optimal rental price and furnishing surcharge. For example, we consider the location and furnishings of your apartment, as well as comparative rates of similar apartments in the area, and can therefore give you a data-based recommendation for the optimal rental price of your furnished apartment. 

Would you like a personal rental price consultation? We will be happy to help you! Simply send us a short email to realestate@wunderflats.com.

Please note: This article does not constitute legal advice – the contents of this page have been prepared solely for your information. As we act as a platform, we can and may share our assessments, but we cannot give you a legally binding recommendation for your individual course of action.

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