Rulings by the Federal Fiscal Court and tax courts on residual useful life appraisals and purchase price allocations

Key statements of the ruling

• Principle: 2.5% depreciation for old buildings, deviation only if the proven useful life is less than 40 years.
• The yardstick is the useful life of the respective owner, not a rigid 100-year limit.
• Higher depreciation requires specific findings; general experience-based rates are not sufficient.
• Without reliable evidence, it remains at 2.5%; case was referred back for clarification.

Key statement of the ruling

• It is up to the taxpayer to credibly demonstrate and prove a shorter actual useful life compared to the standardized depreciation; the assessment of the circumstances presented is the responsibility of the tax court as the court of fact.

Key statement of the judgment

• Scale of depreciation: The decisive factor is the actual useful life in accordance with Section 7 (4) sentence 2 EStG in conjunction with Section 11c (1) EStDV. § Section 11c (1) EStDV, i.e. the time during which the building can be expected to be used for its intended purpose.
• Shorter economic than technical useful life: If the economic useful life is shorter than the technical useful life, it can be recognized if there is no other economically viable use.
• Uniform asset disintegrates: In the case of a functionally linked overall system (package distribution system), the uniform usage and functional relationship ceases to exist after the economic consumption of essential sub-buildings (distribution halls after the end of the lease).
• Consequence for depreciation: From this point in time, the overall system must be divided into several assets; uniform depreciation over an amortized total useful life is legally incorrect.
• Outcome of the proceedings: The judgment of the lower court, which was based on a uniform 25-year useful life, was set aside; the case was referred back for a new assessment of the facts (separate consideration of the parts and their useful lives).

Key statements of the judgment

• Expert estimate of the remaining useful life of a building in accordance with the ImmoWertV lawful
• Actual instead of standardized useful life: right of choice strengthened
• Economic rather than technical depreciation sufficient

Key statements of the ruling

• Acquisition-related production costs if the 15% limit is exceeded within three years (including cosmetic repairs and age-related/hidden defects)
• Purchase price allocation on the reporting date according to real market values using the asset value method without the influence of subsequent rent increases or DCF approaches
• Measures exceed 15% limit, are added to the AfA assessment basis; only minor corrections to AfA and income-related expenses, complaint largely dismissed

Key statement of the judgment

• For the reduction of the useful life and a higher depreciation, expert opinions can admissibly combine all relevant factors; the tax offices may not restrict the freedom of choice of the method of presentation, not even with reference to the BMF letter of 22.02.2023.

Key statements of the ruling

• The tax office must apply depreciation according to the proven shorter actual useful life instead of standardization.
• Any suitable method of presentation is permissible; a special building substance or ERAB report is not mandatory.
• ImmoWertV and AGVGA-NRW models can provide suitable evidence of the remaining useful life.
• An additional profitability calculation is not a prerequisite for recognition.
• The higher depreciation reduces the determined income per year by EUR 13,409.14; the costs are borne by the tax office.

Key statements of the judgment

• The declining usufruct value when acquiring a co-ownership half can increase acquisition costs if it is directly economically related to the acquisition.
• A shortened depreciation period can be proven by an expert determination of the remaining economic useful life (e.g. according to SWRL/ImmoWertV); an ERAB report is not mandatory.

Key statement of the ruling

• A shorter actual useful life can be applied instead of standardized depreciation if it is plausibly proven.
• An ERAB building stock appraisal is not absolutely necessary for this.
• An appraisal in accordance with ImmoWertV/Annex 4 can prove the actual useful life if it is methodically comprehensible.
• In this case, a useful life of 31 years was recognized and the depreciation was determined accordingly.
• The acquisition costs were divided into 43.96% land and 56.04% building, and the tax office must recalculate.
• The costs were allocated 23% to the plaintiffs and 77% to the tax office.

Key statement of the judgment

• Feigned termination for personal use: If there is no serious intention to use the property, the landlord is liable to the tenant for damages in accordance with Section 280 (1) BGB.
• Causality: Consent to termination by mutual agreement or failure to pursue the process does not interrupt the claim for damages if the personal use did not actually exist.
• Legal consequence: In addition to monetary compensation, the tenant can in principle also demand the restoration of his previous tenancy and possession rights.

• Judgment of the Münster Fiscal Court dated April 2, 2025, Ref. 14 K 654/23 E
  • "Expert estimate of the remaining useful life of a building in accordance with the ImmoWertV lawful"
• Judgment of the Düsseldorf Fiscal Court dated August 16, 2023, case no.: 2 K 2449/18 E
  • "Expert opinion on purchase price allocation commissioned by the court incidentally determines shorter remaining useful life"
• Judgment of the Mecklenburg-Western Pomerania Fiscal Court from 29.06.2023, Ref.: 2 K 290/17
  • "According to the court, BMF letter contradicts the freedom of choice in the method of demonstrating a shorter useful life"
• Ruling of the Münster Fiscal Court from February 14, 2023, case no. 1 K 3840/19 F and 1 K 3841/19 F
  • "Remaining useful life can be determined in accordance with the Real Estate Value Ordinance (ImmoWertV)"
• Judgment of the Cologne Fiscal Court dated October 20, 2022, case no. 6 K 1506/17
  • "Useful life must be proven with the greatest possible probability - not with absolute conscientiousness"
• Judgment of the Cologne Fiscal Court dated March 23, 2022, case no. 6 K 923/20
  • "Remaining useful life determined as a model is sufficient - no building substance report necessary"
• BFH ruling from March 4, 2008, case no. IX R 16/07
  • "Depreciation of buildings that form an overall system"

Key message of the ruling

• A contractual purchase price allocation may not be replaced solely by the BMF working aid, even if the contractual allocation is obviously incorrect.
• The BMF working aid does not reflect real market values because it is restricted to the simplified asset value method and does not use regional factors for the building value.
• In the event of a dispute over the purchase price allocation, the court should generally obtain an expert opinion from a publicly appointed and sworn expert if there is no proven expertise of its own.
• As a result, the BFH overturned the decision of the tax court and referred the case back: the contract allocation was not viable, but the mere replacement by the working aid was also inadmissible.

• Ruling of the Federal Fiscal Court from July 21, 2020, IX R 26/19
  • "Purchase price allocation to land and buildings: Tax court may not replace the contractual purchase price allocation with the allocation determined using the BMF's working aid"
  • Keywords: Jacoby method