Good and affordable should his tenants live, real estate owner Wolfgang Donhärl. But that's hard, because tax law punishes social landlords and drives them to rip off.

One might think that the house in Aurbacherstraße would be on another planet, or at least in another city. A beige old building with a round bay window, 13 apartments, three shops. For four apartments, the number four before the comma stands for the rent per square meter; then it goes up to five, six, seven and nine euros to eleven euros, which is the most expensive rent in the house. This means that even these miles away from the prices at which apartments in Munich are now leased. The average is just under 18 euros per square meter.

But the house on Aurbacherstrasse is not on another planet and not in another city; It is located in the middle of a popular Munich district, in the Au. Not far from the river Isar and not far from the former Paulanergelände am Nockherberg, where the Bayerische Hausbau is currently building expensive and very expensive condominiums, which are advertised on large signs. The house belongs to Wolfgang Donhärl and his sister; they inherited it from their mother. Both live in the house. The rents reflect how long someone has lived in his home and how much has been modernized over time. A tenant lives since 1956 in her apartment, she still has an old gas stove. The last tenant change took place last year.

Wolfgang Donhärl's ancestor Josef Schmid became rich because he sold horses. He built houses from the money.

(Photo: Robert Haas)

If you visit Donhärl, 52, in his apartment, he first introduces you to a second gentleman. Serious look, mustache, clothes of fine cloth – the portrait of the Lord is immortalized on an oil painting leaning against a cabinet door in the living room. It is a man named Josef Schmid, horse dealer from Rott am Inn, an ancestor of Wolfgang Donhärl. Schmid had brought it to a great prosperity as a trader, he had moved to Munich and had built a house for each of his ten children in the then new development area Haidhausen. Donhärl has to go that far, because his house in Aurbacherstraße, completed in 1901, is one of them.

"I know that we are privileged"

Since then, it has been passed on in the family. Wolfgang Donhärl grew up in elementary school age in the Aurbacherstraße and later moved back into the house when he founded a family. "I know that we are privileged," he says, "we live in a great apartment." The household has grown over decades. Children grew up together. The hairdresser on the ground floor accepts the parcels, and for the oldest tenant, who lives on the fourth floor, they have set up a chair on each floor, so that they can rest while climbing the stairs in between.

Wolfgang Donhärl wants to get all this so that his tenants can continue to live well and affordably with him. However, for this to work and for him to be able to do good business as an owner at the same time, "it requires a lot of enthusiasm and goodwill," says Donhärl – and that has something to do with the tax office. In the eighties his mother inherited the house. She left the rents as they were, renovated windows and façade. She gave part of the house to her two children during her lifetime; she died a year ago. The tax office now demands a subsequent payment of the gift tax: 230,000 euros. In addition comes the inheritance tax, 760 000 euro. Makes a close million together.

The estate tax calculates the tax office based on the land value of land, eight million euros, it is currently worth. The gift tax, however, depends on the rents – but not on the actual achieved, but on the potentially achievable, according to the rent index, then. The rent index, in which only new rents from the past four years are incorporated and which is therefore rather a rent increase mirror. The tax office also expects that the attic would be expandable. It considers the appreciation potential of the property; it treats the owner as if he wants to sell.

Today you get rich when you sell houses – but Donhärl does not want to sell.

(Photo: Robert Haas)

Of course, Wolfgang Donhärl and his sister could do that. Selling to an investor, as it happens all the time in this city, in Haidhausen and Schwabing, in the Isarvorstadt and in Sendling. The investor would fully exploit the appreciation potential, he would modernize, expand the loft and re-let. Many of Donhärl's tenants could no longer afford their apartments. A sale would never come to his mind – he wants to stay here himself. "What would I do with eight million euros to buy a villa in Poing?" Donhärl laughs. He wants to keep the house that has been owned by his family for almost 120 years. "There are so many stories on it."



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