What is the purchase price distribution?

The purchase price allocation refers to the allocation of the total purchase price of a property to the various components, in particular the land and building. This allocation is relevant for tax purposes, particularly in connection with the depreciation of rented properties. The exact allocation of the purchase price between the land and the building influences the amount of tax-deductible depreciation on the building. A precise purchase price allocation is therefore important in order to make optimum use of tax benefits and ensure correct taxation.