German language courses for EU foreigners
Why German is relevant for EU foreigners and employers Not all professions require knowledge of German. Nevertheless, it is important for the integration of EU workers...
If you want to attract workers from the EU to your company, providing employee housing can be an important issue in the recruitment process. Providing housing for your employees is more than just a benefit: it eases the transition to Germany, helps them settle into the working environment and builds long-term loyalty to your company. In this article, we provide you with strategies for finding a solution for company housing that benefits both sides.
Companies can buy or rent apartments to provide employee housing for their workers. This could involve either an independent household or shared accommodation. In both cases, the premises must include a kitchen and sanitary facilities. If these requirements are not met and the employee shares a kitchen with non-family members, it is considered shared accommodation. This does not qualify as company housing and is regulated by the Social Security Compensation Ordinance. In such cases, it is a matter of shared employee housing, which offers a flexible and cost-effective alternative amidst tight housing markets and rising rental prices.
If the company pays the rent or houses the workers for free in a company-owned apartment, no rental contract is necessary. However, the company housing is tied to the employment relationship and must be vacated within one month of termination of employment with written notice. There is also the option to sign a rental contract and charge rent, in which case the accommodation is not tied to the employment relationship.
Company Rental Housing: In this model, the company and the employee sign a rental contract for a company apartment. The employee pays rent, and the apartment is not directly linked to the job. A special rule applies if the rent is below market value, as this creates a taxable benefit for the employee. In case of termination, the landlord has a special right of termination.
Company-Owned Housing: Here, the employer provides the employee with housing free of charge or for a reduced rent without signing a separate rental contract. This company housing is part of the employment relationship and must be vacated after its termination. This also creates a taxable benefit for the employee.
Function-Tied Company Housing: This type of company housing is required for certain jobs, such as caretakers or residential facility managers. The housing is tied to the job function and must be vacated when the employment ends. It is considered part of the salary and is therefore taxable.
With rising rents and falling purchase prices for condominiums, buying property is a strategically smart solution for employers. In 2023, rents increased by 4.8%, while purchase prices fell by 6.7%. Buying company apartments ensures long-term stable housing costs and increases attractiveness to workers. This investment can help meet staffing needs while simultaneously enhancing employee retention.
Providing employee housing also offers tax benefits for the employer. The acquisition and ongoing costs for the apartments can be deducted as business expenses. These include:
To fully utilize tax advantages, it is advisable to consult accounting and tax advisors.
For companies in major cities like Frankfurt, Berlin, Hamburg, or Munich, where rental and purchase prices for apartments in the city center are often very high, a compelling alternative is to rent or buy apartments in well-connected suburbs. Suburban areas that are easily accessible by regional trains offer a cost-effective option without compromising on connectivity to the city. An example of this is the route from Fürstenwalde/Spree to Berlin. The travel time from Fürstenwalde/Spree station to Alexanderplatz station in Berlin is only 40 minutes by the regional train RE1. The RE1 runs every 30 minutes, offering a convenient and quick connection to the capital. Rental prices for apartments in Berlin average €17.23 per square meter in 2024. In contrast, the average local rent in Fürstenwalde/Spree is €10.25/m² in 2024. This option allows companies to offer their employees high-quality housing at lower prices while maintaining easy access to the workplace in the city.
Many well-known German companies provide housing for their workers – not only to position themselves as attractive employers but also due to the housing shortage or to attract job seekers to less central locations. The latter can be financially beneficial for employers: due to the highly variable rental prices, it can be advantageous to move company housing to rural areas. In less sought-after regions, rental and purchase prices are significantly lower, offering long-term financial benefits for your company.
Big cities offer many opportunities and are particularly attractive to young people. However, if your company is located in a rural area and additionally provides company housing, this can be a decisive advantage for potential applicants. A company apartment alleviates the stress of finding housing and offers financial security through lower living costs. Moreover, such an offer signals that the company cares about the well-being of its employees, significantly enhancing the attractiveness of the job offer and fostering long-term employee retention.
Are you ready to finally fill vacancies and offer workers an attractive job in Germany? Use JOBSMART to find motivated employees for your company and benefit from an applicant pool of over 13 million job seekers from all over the EU! Book a demo now!
