The year 2026 brings a series of important tax innovations – from the commuter allowance to new tax-free amounts and changed depreciation rules for real estate. We explain what is specifically changing and what it means for you.
1. Distance Allowance (Entfernungspauschale): Uniformly 38 cents from the first kilometre
From 2026, the increased distance allowance of 38 cents per kilometre of distance applies from the very first kilometre – no longer only from the 21st kilometre onwards. This means that commuters with shorter journeys to work also benefit from the higher flat rate. Previously, a rate of 30 cents applied to the first 20 kilometres.
The mobility premium (Mobilitätsprämie) for low-income earners is also extended indefinitely. It amounts to 14% of the distance allowance and can be applied for via the tax return.
2. Increased tax-free amounts for volunteering and instructors
Those who are involved in voluntary work will benefit from higher tax-free income in 2026:
- Instructor allowance (Übungsleiterfreibetrag - § 3 Nr. 26 EStG (Income Tax Act)): raised to 3,300 € per year – for coaches, supervisors, instructors or choir directors in non-profit associations.
- Volunteer allowance (Ehrenamtspauschale - § 3 Nr. 26a EStG): increased to 960 € per year – for all other voluntary activities.
Both remain tax-free and exempt from social security contributions.
3. Active Pension (Aktivrente): Up to 24,000 € tax-free for pensioners in work
New from 2026: Those who have reached the statutory retirement age and continue to work can receive wages of up to 24,000 € per calendar year tax-free. This regulation is intended to create an incentive to voluntarily remain active in professional life for longer.
4. One-fifth rule (Fünftelregelung): Only via the assessment procedure
The tax concession for severance pay and redundancy payments – the so-called one-fifth rule (§ 34 EStG) – will no longer be automatically applied during wage tax deduction by the employer from 2026. In the future, it will apply exclusively via the tax return. Those affected should therefore definitely file a tax return.
5. Depreciation of buildings: What property owners need to know
Various depreciation models are available for let properties:
Linear depreciation (AfA - § 7 Abs. 4 EStG):
- 2% annually for buildings completed before 1 January 2023
- 3% annually for residential buildings from 1 January 2023
- 2.5% for older non-residential buildings (1925–1994)
Declining-balance depreciation (Degressive AfA - § 7 Abs. 5a EStG):
- 5% of the respective residual value for residential buildings with construction starting between 1 October 2023 and 30 September 2029
- Switch to linear AfA is possible at any time
Special depreciation:
- Listed building AfA (Baudenkmal-AfA - §§ 7h, 7i EStG): up to 9% in the first 8 years
- New rental housing AfA (§ 7b EStG): additionally up to 5% in the first 4 years
Conclusion: Tax planning is particularly worthwhile in 2026
The tax changes in 2026 offer new opportunities for structuring for employees as well as pensioners and property owners. As a member of lexo.tax, we support you in making the best use of all these new regulations in your tax return.