Key statements of the judgment
- A private appraisal can be used to demonstrate a shortened remaining useful life
- EStG §7 para. 4 (2) does not restrict this method of choice
- the expert method for determining the remaining useful life pursuant to Section 4 (3) ImmoWertV 2022 (formerly Section 6 (6) ImmoWertV 2010)
- Determination of the remaining useful life using the points grid method is to be recognized for tax purposes as a standardized procedure
- A lack of certification is not a general reason for exclusion
- The expert opinion can still be substantiated, appropriate and recognized
- The law itself does not require a specific certification and/or qualification
Wording of the judgment
Guiding principle
The taxpayer may use any expert method that appears suitable in the individual case to provide the necessary evidence to demonstrate a shorter actual useful life of a building in accordance with Section 7 (4) sentence 2 EStG (BFH, judgment of 23 January 2024, IX R 14/23, BFH/NV 2024, 823 following BFH, judgment of 28 July 2021, IX R 25/19, BFH/NV 2022, 108).(para.57) (para.59) A private expert opinion can also be the basis for estimating a shortened actual remaining useful life.(para.62)
Guiding principle
1. contrary to the more far-reaching requirements set out by the tax authorities (see BMF letter dated 22.02.2023, BStBl. I 2023, 332), the expert determination of the remaining useful life in accordance with Section 6 (6) ImmoWertV 2010 (now Section 4 (3) ImmoWertV 2022) is to be regarded as an appraisal method recognized by experts, which cannot be excluded for tax law estimates without a statutory order. The determination provided for in Annex 4 of the Property Value Directive (now Annex 2 to Section 12 (5) sentence 1 ImmoWertV 2022) via a point grid procedure, to what extent the respective modernization elements modify the remaining useful life depending on the total useful life, is to be recognized as a typifying procedure that is not alien to a tax law estimate (see BFH ruling of 23.01.2024 - IX R 14/23).(para.59) (para.62)
2. the mere fact that the expert commissioned by the taxpayer has neither a separate certification nor is publicly appointed or sworn does not mean that his statements do not constitute a suitable basis for estimation. The law itself does not require that the evidence be provided by an expert opinion from a qualified expert in a specific way.(para.70)
Facts of the case
The parties are in dispute for the years 2011 to 2014 regarding the consideration of a shortened useful life in accordance with Section 7 (4) sentence 2 of the German Income Tax Act (EStG) when determining the amount of the depreciation for wear and tear (AfA) for various properties.
I. The plaintiff is a company under civil law which owns a number of properties throughout Germany and in the years in dispute essentially generated income from letting and leasing. The properties in dispute include, inter alia, the following properties:
A, K-Straße
The plaintiff acquired this multi-storey residential and commercial building in the city center of A by purchase agreement dated ... February 2011 for a purchase price of € ... excluding incidental acquisition costs. The building, which was originally built in the 19th century, had been structurally altered, extended and converted several times prior to its acquisition by the plaintiff. The transfer of benefits and encumbrances to the plaintiff took place in April 2011.
B, S-Straße
The plaintiff acquired the property, built in 1960 with a three-storey commercial building, by purchase agreement dated ... November 2012 for a purchase price excluding ancillary costs of € ... The transfer of benefits and encumbrances to the plaintiff took place on ... March 2013.
C, L-Straße
With the purchase agreement dated ... June 2013, the plaintiff acquired this office and commercial building built in 1956 in a shopping street in the city center of C for a purchase price of € ... excluding ancillary costs. Upon payment of the purchase price in December 2013, the benefits and encumbrances were transferred to the plaintiff.
D, W-Straße
In 2014 (transfer of ownership ... December 2014), the plaintiff acquired this commercial building, built in 1949 and located in the center of D, for a purchase price of around ... € (excluding ancillary costs).
II By means of notices on the separate and uniform determination of tax bases, which were each issued subject to review, the defendant determined income from letting and leasing in addition to income from capital assets that was not disputed in detail between the parties. In doing so, it took into account depreciation rates of 2% for each of the properties in dispute, based on the standardized useful life in accordance with Section 7 (4) sentence 1 no. 2 b) EStG.
For the 2011 assessment year, an assessment notice on the separate and uniform determination of tax bases was initially issued on August 28, 2013 (...). After several amendments, income from letting and leasing in the amount of € ... was determined by a further notice of amendment dated August 9, 2018 (...).
For the 2012 assessment period, the defendant determined income from letting and leasing for the first time by means of a notice on the separate and uniform determination of tax bases dated July 14, 2014 (...). After several amendments, income from letting and leasing in the amount of € ... was determined by a further notice of amendment dated July 19, 2016 (...).
By notice for 2013 on the separate and uniform determination of tax bases dated July 19, 2016, the defendant determined income from letting and leasing in the amount of € ... (...).
For the year 2014, income from renting and leasing in the amount of € ... was determined by notice on the separate and uniform determination of tax bases dated July 19, 2016 (...).
III The plaintiff appealed against the assessments for the assessment periods 2012 to 2014 with objections dated August 2, 2016 (...), received by the defendant on August 5, 2016, and against the assessment for the year 2011 dated August 9, 2018 with an objection dated August 22, 2018 (...). With its objections, it requested the recognition of higher depreciation amounts in accordance with Section 7 (4) sentence 2 EStG for the properties still in dispute and some other properties due to a shorter actual remaining useful life.
1 In support of this, the plaintiff submitted various private expert opinions by expert E (hereinafter: expert witness), to which reference is made for details (see expert opinion dated December 10, 2017, p. 219 et seq. General properties II for the property in A; expert opinion dated August 20, 2017 and supplementary opinion dated October 31, 2018, p. 1 et seq., 10 et seq., 28 et seq. General properties V for the property in B; expert opinion dated September 23, 2017 and supplementary statement dated September 14, 2019, pp. 135 et seq., 170 et seq. General property V for the property in C; expert opinion dated April 16, 2017 and supplementary statement dated October 31, 2018, pp. 199 ff., 216 ff. General properties V for the property in D). The expert witness had determined the following remaining useful lives for the individual properties still in dispute between the parties in the legal proceedings:
Property
Reference date
Remaining useful life in years
A, K-Straße
01.05.2011
31
B, S-Street
01.04.2013
20
C, L-Street
30.12.2013
18
D, W-Street
01.01.2015
25
The expert witness was required pursuant to § 6 para. 6 of the Ordinance on the Principles for Determining the Market Values of Real Estate and the Data Required for the Valuation (Real Estate Valuation Ordinance - ImmoWertV 2010) and had determined a total useful life on the basis of the respective usage group with the aid of Annex 3 of the Directive for Determining the Material Value (Material Value Directive, SW-RL) and then, taking into account the respective modernizations, determined a remaining useful life using the points table in Annex 4 of the SW-RL, whereby the allocation of points is explained in more detail in the individual expert opinions.
On this basis, the plaintiff requested the following depreciation rates:
Object
Depreciation rate
A, K Street
3,23
B, S-Street
5
C, L-Street
5,56
D, W-street
4
2 The defendant asked the respective local tax offices to comment on the appraisals submitted by the plaintiff and to allocate the purchase prices to land and buildings. Thereupon, the requested tax offices commented on the individual properties:
A, K-Straße
In a letter dated February 20, 2018, the tax office A-Stadt agreed that there were no fundamental objections to the remaining useful life of 31 years determined by the private expert. However, the private valuer had determined the remaining useful life in accordance with the provisions of the ImmoWertV, which was not sufficient to prove a shorter actual useful life within the meaning of Section 7 (4) sentence 2 EStG (p. 207 et seq. General Property II).
In a letter dated the same day, the tax office A-Stadt communicated the result of a breakdown of the purchase price into value shares for the building and the land, according to which 54% was attributable to the building. In this context, it stated that the remaining useful life of 31 years was realistically estimated and would be taken into account accordingly as part of the "simplified purchase price allocation". Taking into account a total useful life of 70 years, the tax office A-Stadt assumed a notional year of construction of 1972 and, on this basis, calculated production costs of ... € per sqm. For details, please refer to the letter dated February 20, 2018 and the attached calculation, p. 213 et seq. General properties II.
B, S-Straße
In a letter dated July 18, 2016, the tax office B commented on the allocation of the purchase price. It determined a building value share of 82.75 % by setting the land value interest in relation to the gross profit. For details, please refer to the statement (p. 49 General Property V).
In its expert opinion dated November 3, 2017 (sheet 7 General Property V), the tax office B stated that the expert opinion submitted did not provide evidence of a shortened useful life within the meaning of Section 7 (4) sentence 2 EStG. The definition of the economic useful life within the meaning of this provision is not identical to the useful life in accordance with the ImmoWertV or the SW-RL, which form the basis of the experts' calculations and reports.
C, L Street
In a letter from a building expert from the tax authorities ... dated 31 October 2018 to the effect that the remaining useful life of 18 years determined in the expert opinion provided by the plaintiff could not be recognized as a shortened remaining useful life within the meaning of Section 7 (4) sentence 2 EStG, as the evidence essentially referred to a model consideration in accordance with the market value determination. As part of the proof of a shorter useful life, a statement should be made on the condition of the building, in particular with regard to its elements determining the useful life (shell) (p. 150ff. General Property V).
As part of his purchase price allocation of November 5, 2018, the building expert of the tax office F based the calculation on the remaining useful life of 18 years determined in the expert opinion provided by the plaintiff and consequently estimated a property interest rate of 6.5 %. Based on this, it determined a building value share of 68.89%. For details, please refer to the letter dated October 31, 2018 (p. 143 et seq. General Property V).
D, W-Straße
In a letter dated April 16, 2018, a building expert from the tax authorities ... for the tax office D stated that an actually shortened remaining useful life for the purposes of tax depreciation was to be proven by an expert opinion to be prepared specifically for this purpose. Such a report was not available. A shortened depreciation period should therefore be rejected.
Within the scope of her determination of the capitalized earnings value for the purposes of the purchase price allocation, the building expert applied a remaining useful life of 25 years in accordance with the plaintiff's expert opinion and determined a building value share of 67.42% on this basis. For details, please refer to the letter dated April 16, 2018 and the attached valuation (p. 206 et seq. of the General Property V file).
3 When determining the AfA assessment bases for the properties in dispute, the defendant tax office used the purchase price allocations determined by the respective local tax offices.
During the objection proceedings, the defendant recognized the shortened remaining useful lives for two further properties still in dispute at the time and issued corresponding amendment notices for the years in dispute (...) on 12 June 2020. For the year 2011, the defendant determined income from letting and leasing in the amount of ... €.
Finally, in response to the plaintiff's objections, the defendant amended the contested assessments to the extent that it recognized a depreciation rate of 3 % for the property in B, referring to the significant defects identified by the private expert opinion and, in particular, the asbestos-containing building materials partially installed in the building. The defendant also remedied other properties still in dispute between the parties in the objection proceedings, so that amended assessment notices were issued for the assessment periods 2012 to 2014 (see annexes to the (partial) objection decision of April 24, 2023, ...), by which the defendant determined income from letting and leasing in the amount of € ... for 2012, € ... for 2013 and € ... for 2014. Otherwise, it rejected the objections in an objection decision dated April 24, 2023 (...).
IV. The plaintiff contests this with its action filed on May 15, 2023. It argues that all the cases in dispute concern the question of the economic useful life of the properties. § Section 7 para. 4 sentence 2 EStG grants the taxpayer the right to choose whether to make deductions corresponding to the actual useful life. The law does not require any justified exceptions, but simply a substantiation of the shortened useful life compared to the calculated useful life resulting from § 7 para. 4 sentence 1 EStG. As a rule, the useful life is to be determined by way of an estimate, as at least uncertain future events must also be assessed. If the economic useful life is shorter than the technical useful life, the taxpayer can rely on this. Case law does not impose strict requirements on the evidence to be provided. The defendant wrongly rejects the expert reports submitted by the plaintiff as evidence of a shorter economic life and, contrary to the requirements of the BFH case law, relies solely on technical wear and tear, which must be proven by a building substance report. The defendant had not raised any substantiated objections regarding the application of the expert methodology of its expert.
Based on the depreciation rates claimed by the plaintiff, the plaintiff determines the following deviations from the depreciation amounts taken into account by the defendant: ... ...
In view of this, the plaintiff requests the following for 2011: Reduction of the established income from letting and leasing from ... € by ... € to ... €
for the year 2012: reduction of the assessed income from letting and leasing from ... by ... € to ... €
for 2013: Reduction of the assessed income from letting and leasing from ... € by ... € to ... €
for 2014: reduction of the assessed income from letting and leasing from ... € by ... € to ... €
The defendant requested that the action be dismissed.
It argues that the expert opinions submitted by the plaintiff do not meet the requirements of the BMF letter dated 22 February 2023 and cannot be recognized by the defendant. Without exception, the private appraisals referred to a calculation in accordance with the ImmoWertV. Contrary to the plaintiff's statements that it is solely a matter of assessing the economic useful life, this is not apparent from the expert opinions submitted to date and the plaintiff's submission. The expert had not examined the property taking into account the necessary determinants, which could also be due to the fact that he did not have the certification required by the BMF letter (para. 22). The plaintiff's submission to date does not justify a reduced economic life.
With regard to the shortened economic useful life, it should be noted that this is logically based on the technical useful life. However, the witness had hardly made any comments on the technical useful life. However, the technical useful life is the benchmark for a possible shortened useful life. The expert reports lacked explanations on the economic aspects as an essential determinant. In this respect, he, the defendant, referred to the statements of the expert G, according to which property-related or regional particularities were particularly important. The taxpayer's explanations must provide information on the relevant determinants, such as technical wear and tear, economic depreciation, legal restrictions on use, which influence the useful life in the individual case and on the basis of which the period in which the relevant building can probably be used in accordance with its intended purpose can be determined with sufficient certainty by means of an estimate. It is also questionable whether the model for determining the remaining useful life of residential buildings (Annex 2 and 4 of the SW-RL) can be applied to commercial buildings at all. In addition, the expert deducted points across the board based on the number of years since a measure was carried out. However, the annex itself states that if measures were carried out further back, it should be checked whether fewer points should be applied. If, on the other hand, the building elements that had not been modernized still met contemporary requirements, points comparable to a modernization should be awarded. The expert witness had obviously not done this.
In the absence of an investigation and discussion of the key determinants, the expert witness's reports were not meaningful and could not be taken into account in the proceedings. In order to estimate the disputed useful life, the assessment of a court expert was required.
In the purchase price allocation, the shortened useful lives requested by the plaintiff were only taken into account for the properties in D and C, but not for the two properties in A and B. In this respect, the purchase price allocations should also be adjusted to the shortened useful life if the court assumes a shortened useful life contrary to its, the defendant's, opinion. If a shortened remaining useful life is taken into account in the purchase price allocation, the plaintiff already lacks the intention to generate a surplus, so that the action should be dismissed for this reason alone.
V. On January 18, 2024, the court issued an order to take evidence on the actual remaining useful life of the properties in dispute by means of an oral expert opinion by expert G. The expert commented on this in a letter dated February 26, 2024 and pointed out, among other things, that he could only determine a remaining useful life for each of the properties by way of an estimate on the basis of an income capitalization valuation with land value determination carried out in line with the market and for the purposes of tax purchase price allocation. On the basis of the income and all other circumstances, a building income value with a remaining useful life in line with the market had to be determined. The value determined in this way must then be checked for plausibility using various comparative values. An additional complicating factor was that the valuation dates were a long time ago, which would not be a problem due to his, the expert's, knowledge of the market conditions in Hamburg in the past, but would be a problem in the four locations in which the properties were located and about which he lacked the respective knowledge.
By order of the Senate dated April 8, 2024, the legal dispute was transferred to the rapporteur as a single judge.
The court took evidence by hearing the expert witness E. With regard to the result of the taking of evidence, reference is made to the minutes of April 11, 2024.
In a letter dated January 22, 2025, the court informed the parties that it no longer considered it necessary to obtain a court expert opinion after hearing the expert witness.
The defendant commented on this in a statement dated 21 February 2025 to the effect that it was not the shortened useful lives but the standardized useful lives that were included in the purchase price allocation. Although a shortened remaining useful life was mentioned in the text for the property in A, this was not taken into account in the purchase price allocation. The mere use of a fictitious year of construction did not lead to the shortened remaining useful life being taken into account in the purchase price allocation. This is because the use of a fictitious year of construction only has an effect on the hypothetical total useful life and the valuation of the normal production costs (NHK), whereas the shortened remaining useful life must have a negative impact on the economic valuation of the building. The defendant requested in writing that an expert be commissioned to determine the economic remaining useful life of the property in dispute and to demonstrate its effect on the purchase price allocation.
...
Reasons for the decision
I. The decision is made by the single judge in accordance with § 6 of the Fiscal Court Code (FGO).
II. the action is successful.
The contested assessment notices for the years 2011 to 2014 are unlawful and violate the plaintiff's rights (Section 100 (1) sentence 1 FGO) insofar as the defendant did not take the shortened useful lives declared by the plaintiff pursuant to Section 7 (4) sentence 2 EStG as a basis when determining the plaintiff's income from letting and leasing.
1. in the case of assets whose use or utilization by the taxpayer to generate income is expected to extend over a period of more than one year, the portion of the acquisition or production costs that is attributable to one year if these costs are distributed evenly over the total period of use or utilization (depreciation in equal annual amounts, § 7 para. 1 sentence 1 EStG) is to be deducted for one year in each case; the deduction is calculated according to the normal useful life of the asset (§ 7 para. 1 sentence 2 EStG). Deviating from this, the depreciation for a building used to generate income is determined according to the fixed percentages of § 7 para. 4 sentence 1 EStG; the regulation represents a legal standardization of the useful life within the meaning of § 7 para. 1 sentence 2 EStG.
In accordance with Section 7 (4) sentence 2 EStG, the depreciation corresponding to the actual useful life of a building can be applied instead of the depreciation in accordance with Section 7 (4) sentence 1 EStG. According to Section 11c (1) sentence 1 of the Income Tax Implementing Ordinance (Einkommensteuer-Durchführungsverordnung - EStDV), the useful life within the meaning of Section 7 (4) sentence 2 EStG is the period during which a building can be expected to be used for its intended purpose. The useful life to be estimated is determined by technical wear and tear, economic depreciation and legal circumstances that may limit the useful life of an asset. The technical useful life, i.e. the period in which the asset is subject to technical wear and tear, is the starting point. If the economic useful life is shorter than the technical useful life, the taxpayer can invoke this. Whether the depreciation can be based on a shortened useful life within the meaning of Section 7 para. 4 sentence 2 EStG that is shorter than the standardized periods provided for by law (Section 7 para. 4 sentence 1 EStG) depends on the circumstances of the individual case (BFH, judgment of 28 July 2021, IX R 25/19, BFH/NV 2022, 108 with reference to BFH, judgment of 4 March 2008, IX R 16/07, BFH/NV 2008, 1310).
2. the taxpayer bears the burden of proof and establishment for a shorter actual remaining useful life (see BFH, judgment of January 23, 2024, IX R 14/23, BFH/NV 2024, 823; BFH, judgment of July 28, 2021, IX R 25/19, BFH/NV 2022, 108). The useful life must be estimated. According to general principles, such an estimate does not require certainty, but rather only the greatest possible probability (BFH, judgment of January 23, 2024, IX R 14/23, BFH/NV 2024, 823 with reference to BFH, judgment of September 28, 1971, VIII R 73/68, BFHE 103, 468, BStBl. II 1972, 176). The estimate is only to be rejected if it is clearly outside the appropriate estimation framework (BFH, judgment of July 28, 2021, IX R 25/19, BFH/NV 2022, 108). The assessment of the basis of the estimate is the responsibility of the tax court as the court of fact in the appeal proceedings (BFH, judgment of October 28, 2008, IX R 16/08, BFH/NV 2009, 899; BFH, decision of April 22, 2013, IX B 181/12, BFH/NV 2013, 1267, each with further evidence).
a) In order to demonstrate the shortened actual useful life of a building used to generate income, the taxpayer may use any method of demonstration that appears suitable in the individual case to provide the necessary evidence; in this respect, it is necessary that the taxpayer's explanations provide information on the relevant determinants - e.g. technical wear and tear, economic devaluation, economic depreciation, etc. - of the building. technical wear and tear, economic depreciation, legal restrictions on use - which influence the useful life in the individual case and on the basis of which the period in which the relevant building can probably be used in accordance with its intended purpose (Section 11c (1) sentence 1 EStDV) is to be determined with sufficient certainty by means of an estimate (BFH, judgment of 28 July 2021, IX R 25/19, BFH/NV 2022, 108).
b) The provision of Section 7 para. 4 sentence 2 EStG grants the taxpayer the right to choose whether to be satisfied with the standardized depreciation rate pursuant to Section 7 para. 4 sentence 1 EStG or to claim and demonstrate an actually shorter useful life. As part of the official investigation to be carried out by the tax office, in which all circumstances favorable to the parties involved must also be taken into account in accordance with Section 88 (1) sentence 2 of the German Fiscal Code (AO), the taxpayer's estimate must be taken as a basis as long as it is based on considerations that a reasonably prudent taxpayer would normally make. Since the taxpayer's estimate cannot require certainty about the shorter actual useful life, but at best the greatest possible probability, it can only be rejected if it is clearly outside the reasonable estimation framework (BFH, judgment of July 28, 2021, IX R 25/19, BFH/NV 2022, 108).
aa) Contrary to more far-reaching requirements established by the tax authorities (see BMF letter dated February 22, 2023, BStBl. I 2023, 332), the BFH also considers the expert determination of the remaining useful life pursuant to Section 6 para. 6 ImmoWertV 2010 (now Section 4 para. 3 of the Real Estate Valuation Ordinance of 14 July 2021 (ImmoWertV 2021), Federal Law Gazette I 2021, 2805) as an appraisal method recognized by experts, which cannot be excluded for tax law estimates without a statutory directive (BFH, judgement of 23 January 2024, IX R 14/23, BFH/NV 2024, 823). The determination provided for in Annex 4 SW-RL (now Annex 2 to Section 12 (5) sentence 1 ImmoWertV 2021) via a point grid procedure, to what extent the respective modernization elements modify the remaining useful life depending on the total useful life, is expressly recognized by the highest court case law as a typifying procedure that is not alien to a tax law estimate (see BFH, judgment of 23 January 2024, IX R 14/23, BFH/NV 2024, 823).
bb) It is true that it is not sufficient for the taxpayer to demonstrate and prove a shorter actual useful life within the meaning of Section 7 para. 4 sentence 2 EStG simply by referring to the total and remaining useful life of a building determined as a model in accordance with the relevant real estate valuation regulation. Rather, an expert appraisal is required to estimate the useful life, which in particular relates to the individual circumstances of the property (e.g. repairs or modernizations carried out or not carried out, cf. section 4 (3) sentence 2 ImmoWertV 2021). However, it is not necessary for an expert opinion to address all determinants relevant to the remaining useful life (BFH, judgment of January 23, 2024, IX R 14/23, BFH/NV 2024, 823).
3. applying these standards, the court, on the basis of the expert opinions submitted by the plaintiff, came to the conclusion that the plaintiff correctly used the shortened actual useful life within the meaning of Section 7 (4) sentence 2 EStG as the basis for the properties in dispute. The plaintiff succeeded in proving, within the framework of the required estimate, that the typical useful life to be assumed by law was incorrect in the cases in dispute and that a shorter useful life was to be assumed with the greatest possible probability.
a) The shorter useful life assumed by the plaintiff is based in each case on the findings made by the expert witness in the context of private appraisals for the individual properties in dispute, which were made available to the defendant by the plaintiff. In the individual appraisals, the expert witness estimated the remaining useful life of the respective buildings in accordance with § 6 para. 6 ImmoWertV 2010 and Annex 4 SW-RL (model for deriving the economic remaining useful life for residential buildings taking into account modernizations), which can also be applied analogously to the valuation of administrative, office and commercial buildings (see footnote 1 of the Annex), without leaving the appropriate estimation framework pursuant to § 7 para. 4 sentence 2 EStG.
Marginal number63 The expert witness used factual criteria to determine the condition of the roofs, exterior walls, windows and doors, heating systems, pipes, bathrooms, floor plans and the interior fittings of the respective properties for each of the properties in dispute following an on-site inspection and calculated a remaining useful life based on a total useful life determined according to the specific use of the property, taking into account the points grid in Annex 4 of the SW-RL. In doing so, it specifically addressed the modernization measures carried out and their effects on the economic remaining useful life. The appraisals therefore deal with the individual circumstances of the individual properties and their condition on the respective reporting date.
The expert explained and elaborated on his written statements in the course of his examination as a witness, which made his findings on the respective remaining useful life even more plausible. The witness convincingly and comprehensibly explained that he arrived at his assessments after a comprehensive inspection of the properties and evaluation of numerous documents (...) as well as consideration of a number of aspects such as the technical condition of the properties (insofar as recognizable during site inspections), any legal restrictions on use and factors relevant for (further) letting such as location, size and room layout.
b) Based on the expert statements in the expert opinions and the additional explanations provided by the expert witness during his examination, the court considers itself to be in a position to form a conviction as to the basis of valuation to be applied in the individual case. The court agrees with the convincing explanations of the expert witness and uses them as the basis for its own estimate of the remaining useful life. The model-based determination of the remaining useful life carried out by the expert witness is based on the knowledge gained by the expert during the inspection of the exterior and interior of the buildings, in particular with regard to the modernization measures carried out, existing defects, etc. The expert's statements deal with the determinants that ultimately have a significant influence on the remaining useful life, such as technical wear and tear, economic depreciation and legal restrictions on use.
c) The defendant has not raised any (substantiated) objections to the findings made by the expert witness in the context of the model applied.
aa) Insofar as the defendant believes that the expert opinion prepared by the expert witness does not contain sufficient statements on the technical useful life and also no statements on economic aspects as an essential determinant, this blanket objection does not hold water. On the contrary, the defendant's construction expert called in to take evidence stated himself that the expert witness's approach was consistent in itself and, based on his assignment, was not objectionable. On the merits, the defendant's building expert only complains that the remaining useful life determined in isolation in this way should not be confused with the question of how long a building is actually technically usable, which can only be answered by taking into account the fabric of the building. This objection is aimed solely at the question of the methodology used as the basis for estimating the remaining useful life. However, as described above under II 2. b) aa), case law considers the methodology used by the expert witness to prove a shortened remaining useful life pursuant to § 7 para. 4 sentence 2 EStG to be sufficient and does not object to it.
bb) The objection raised by the defendant that the expert awarded points across the board, regardless of how long ago a modernization measure was carried out, without examining in each individual case whether fewer points should be awarded or whether points comparable to a modernization should be awarded for non-modernized building elements that still meet contemporary requirements, is put forward without any concrete reference to specific modernization measures or objects in the blue and thus does not raise any doubts for the court about the findings of the expert witness.
The accusation of the schematic blanket awarding of points cannot be substantiated by the expert reports either. On the contrary, it is clear that the expert witness justified the allocation of modernization points in each case in detail and in relation to the respective property. For example, he awarded the maximum two modernization points provided for the modernization of the heating system for the properties in B (sheet 44 General Property V) on the grounds that there was a functioning district heating system without major defects, without taking into account the time of the modernization of the heating system and without making the award of points rigidly dependent on modernization within the last five years, as provided for in the table. The appraisal report for the property in C also contains an example of how the appraiser did not award the points rigidly according to the table, but also awarded modernization points if no modernization had been carried out, for example. In this report, for example, two modernization points were awarded for the floor plan design of the property in C on the grounds that the older floor plans were still fully marketable (p. 189 General Property V).
cc) The mere fact that the expert witness commissioned by the plaintiff, unlike in other cases already decided by the courts, neither has a separate certification nor is publicly appointed or sworn, does not mean that his statements are not a suitable basis for the valuation. The law itself does not require, in contrast to § 198 of the Valuation Act (BewG), for example, that the evidence be provided by an expert opinion from an expert qualified in a certain way.
dd) The building experts of the locally competent tax offices consulted by the tax office also rejected the remaining useful lives determined on the basis of the plaintiff's expert opinions in accordance with the BMF letter dated February 22, 2023 (BStBl. 2023, 332), merely by referring to the methodology used, without pointing out any deficiencies in the content of the expert opinions. The approach of the local building experts appears contradictory insofar as, according to their own statements, they nevertheless used the remaining useful lives determined by the plaintiff's expert as a basis when carrying out the purchase price allocation.
ee) The defendant did not raise any further substantive objections to the plaintiff's estimates, such as a deviating estimate of the remaining useful life supported by the report of a building expert.
d) As a result, after the detailed questioning of the expert witness during the taking of evidence on April 11, 2024, the court no longer considers it necessary to obtain a court expert opinion, contrary to the initially issued order to take evidence of January 18, 2024, since the expert opinions explained in detail provide a sufficiently reliable basis for estimating the respective remaining useful lives.
4. contrary to the opinion of the defendant, the contested notices also do not prove to be (partially) lawful because the purchase price allocation did not take into account the shortened useful lives and the depreciation was consequently applied to excessively high building values.
This objection raised by the defendant does not appear to be comprehensible insofar as the locally competent tax offices even adopted the remaining useful lives determined by the expert witness in his expert opinion for their valuation for the purposes of the purchase price allocation.
Thus, the tax office A-Stadt, using a table on "Production costs of multi-family houses and mixed-use buildings" (p. 217 of the property file II General), determined the year 1972 as a fictitious year of construction based on the remaining useful life of 31 years determined by the plaintiff's private expert, taking a total useful life of 70 years as a basis (2011 plus 31 years remaining useful life minus 70 years total useful life). 70 years of total useful life) and, in accordance with this fictitious year of construction, applied an age-related construction discount of 20 % and determined production costs of ... €/m² from the corresponding chart, so that the shortened remaining useful life had a direct effect on the value of the building determined using the asset value method and the property value via the fictitious year of construction.
For the property in C, the building expert explained in detail how the assumption of the shortened remaining useful life of 18 years affected the property interest rate used in the valuation according to the income capitalization approach (see page 5 of the purchase price allocation of November 5, 2018, p. 146 of the property file V General), so that the shortened remaining useful life also had an obvious effect on the valuation for the purposes of the purchase price allocation. Moreover, the defendant itself still assumed in its pleading dated May 16, 2024 that the shortened remaining useful lives were taken into account in the purchase price allocations for properties C and D in any case.
Finally, the defendant itself did not see any reason to reject the purchase price allocation carried out by the tax office B for the property in B and to base an amended purchase price allocation on it when it assumed in its objection decision, in part as a remedy, that a depreciation rate of 3% and thus a shortened remaining useful life of 33.3 years was appropriate for the property in B.
Moreover, the defendant has not now explained that and, if applicable, to what extent the purchase price allocation for the individual properties would change on the basis of the remaining useful lives assumed by the plaintiff.
In view of this, the court also had no reason to further clarify the question of the purchase price allocation, for example by obtaining an expert opinion.
III. 1 The decision on costs is based on Section 135 (1) FGO. The decision on provisional enforceability follows from §§ 151 Para. 3, 155 Sentence 1 FGO in conjunction with §§ Sections 708 no. 10, 711 of the Code of Civil Procedure.
2. there are no grounds for allowing the appeal. The case is neither of fundamental importance, § 115 para. 2 no. 1 FGO, nor does the further development of the law or the safeguarding of uniform case law require a decision by the BFH, § 115 para. 2 no. 2 FGO. It is an individual case decision based on the application of generally recognized principles of case law.