Tax depreciation of buildings according to actual useful life
Background
The German Federal Ministry of Finance recently published a letter that addresses the deduction for wear and tear (AfA) of buildings based on their actual useful life. This letter clarifies how taxpayers should proceed if they wish to claim depreciation for buildings taking into account their actual useful life.
Principles for applying depreciation according to shorter actual useful lives
The letter defines clear principles for applying depreciation after a shorter actual useful life:
- The letter applies to all open cases as of a specified date.
- Description of the application of straight-line depreciation rates for buildings regardless of their actual useful life.
- Conditions under which taxpayers may use depreciation after the shorter actual useful life.
Justification for depreciation according to shorter actual useful life.
The shorter actual useful life must be justified by concrete justifying factors such as technical wear and tear or economic devaluation. The decision is based on objective circumstances.
Special operational buildings and certain parts of buildings
There are exceptions where a shorter useful life can be assumed for certain buildings and parts of buildings without a separate obligation to provide evidence.
Relevant criteria for estimating the shorter useful life
The shorter actual useful life is influenced by factors such as technical wear and tear, economic devaluation and legal restrictions.
Verification methods
In order to prove the shorter actual useful life, taxpayers must submit an expert opinion from a publicly appointed and sworn expert for the valuation of real estate. This expert opinion must state the condition of the building and the reasons for the shorter useful life.
Conclusion: Use our professional expert opinions for tax depreciation of buildings according to actual useful life
Having dealt in detail with the letter of the Federal Ministry of Finance, it is clear that the correct application of depreciation for wear and tear (AfA) according to the actual useful life of buildings is of great importance. This process requires precise knowledge of the legal requirements and careful documentation.
This is where our service comes in. We offer professional appraisals that meet all the provisions and requirements specified in the letter. Our appraisers are publicly appointed and sworn, and they specialize in the valuation of developed and undeveloped properties. They are certified in accordance with DIN EN ISO/IEC 17024 and have the necessary expertise to provide a detailed and well-founded account of the condition of buildings and the reasons for a shorter useful life.
With our appraisals, you can ensure that you comply with legal requirements and make the most of tax benefits. We take into account technical wear and tear, economic devaluation and legal circumstances to provide an accurate estimate of the shorter actual useful life.
Rely on our expertise to professionally manage tax issues related to real estate and buildings. Contact us today to discuss your needs and benefit from our services. Your financial future can only benefit from this wise investment in our expert opinions.
Source and download original info at: https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Einkommensteuer/2023-02-22-absetzung-fuer-abnutzung-von-gebaeuden-nach-der-kuerzeren-tatsaechlichen-nutzungsdauer.html