Landlords can write off real estate against tax more quickly and in higher amounts if they can prove a shorter useful life. An online appraisal is sufficient for this. The Cologne Fiscal Court thus follows the opinion of the Federal Fiscal Court in the same matter.
Owners of leased commercially used real estate can benefit fiscally by depreciating buildings over their useful life - normally with straight-line depreciation of two percent per year according to the German Income Tax Act (EstG). After 50 years, a property would thus be fully depreciated. Each time there is a change of ownership, the depreciation amount and the depreciation period are recalculated.
In many cases, owners can depreciate their property over a much shorter period and claim higher annual deductions for wear and tear (AfA) for tax purposes. To do so, landlords must be able to prove a shorter remaining useful life.
Cologne Fiscal Court: Model remaining useful life as basis for the AfA rate is sufficient
On 9.7.2022, the Cologne Fiscal Court (FG) published its ruling of 22 March (Ref. 6 K 923/20), in which it is clarified that an economic remaining useful life of rented properties determined on a model basis can be considered as the basis for the tax depreciation rate. This is pointed out by the expert platform Nutzungsdauer.com.