{"id":10314,"date":"2025-06-16T13:55:32","date_gmt":"2025-06-16T11:55:32","guid":{"rendered":"https:\/\/meine-renditeimmobilie.de\/?p=10314"},"modified":"2025-06-16T13:55:32","modified_gmt":"2025-06-16T11:55:32","slug":"apportionment-of-the-purchase-price-in-real-estate-transactions","status":"publish","type":"post","link":"https:\/\/meine-renditeimmobilie.de\/en\/apportionment-of-the-purchase-price-in-real-estate-transactions\/","title":{"rendered":"Apportionment of the Purchase Price in Real Estate Transactions"},"content":{"rendered":"<p style=\"font-weight: bold\">\r\n\tWhen purchasing a developed property, it is essential to correctly apportion the purchase price between the building (&#8220;depreciable&#8221;) and the land (&#8220;non-depreciable&#8221;).\r\n<\/p>\r\n<p style=\"font-weight: bold\">\r\n\tThis apportionment has tax implications, especially for depreciation (AfA \u2013 deduction for wear and tear).\r\n<\/p>\r\n\r\n<section>\r\n\t<h2>Why Apportion the Purchase Price?<\/h2>\r\n\t<p>\r\n\t\tWhen acquiring real estate, the acquisition costs are split between building value and land value.\r\n\t<\/p>\r\n\t<p>\r\n\t\tOnly the building portion is eligible for depreciation under tax law (\u00a7\u202f7 para.\u202f4\u20135b EStG). The land value is not subject to wear and tear and is therefore not depreciable.\r\n\t<\/p>\r\n\t<p>\r\n\t\tAn incorrect allocation leads to erroneous tax burdens \u2013 often resulting in lower depreciation.\r\n\t<\/p>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Legal and Judicial Framework<\/h2>\r\n\t<h3>BFH Jurisprudence<\/h3>\r\n\t<ul>\r\n\t\t<li><strong>Residual value method prohibited<\/strong>: On 10.10.2000 (Case IX R 86\/97), the BFH ruled that the allocation must be based on the relative market values, not the residual method.<\/li>\r\n\t\t<li><strong>Contractual apportionment accepted<\/strong>: According to the BFH (16.09.2015, IX R 12\/14), the tax authority may reject notarial apportionments only if the values are economically unjustified.<\/li>\r\n\t<\/ul>\r\n\r\n\t<h3>Developments in Tax Courts<\/h3>\r\n\t<p>Tax courts have set clear limits for acceptable deviations:<\/p>\r\n\t<ul>\r\n\t\t<li>FG Berlin\u2013Brandenburg: Deviations above 20% from the standard land value justify rejection (Ruling 20.03.2024, 3 K 3137\/19)<\/li>\r\n\t\t<li>FG Munich: Deviations below 10% are considered harmless (10.04.2024, 12 K 861\/19)<\/li>\r\n\t\t<li>FG M\u00fcnster and D\u00fcsseldorf are critical of deviations of 30% or double expert values<\/li>\r\n\t<\/ul>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>BMF Tool \u2013 What Is It?<\/h2>\r\n\t<p>\r\n\t\tThe Federal Ministry of Finance (BMF) provides a <strong>free Excel-based tool including a user guide<\/strong> (as of January 2025). It enables:\r\n\t<\/p>\r\n\t<ul>\r\n\t\t<li>Standardized apportionment using comparative, income or replacement value methods<\/li>\r\n\t\t<li>Plausibility checks of existing apportionments<\/li>\r\n\t\t<li>Step-by-step calculation instructions<\/li>\r\n\t<\/ul>\r\n\t<p>\r\n\t\t<a href=\"https:\/\/www.bundesfinanzministerium.de\/Datenportal\/Daten\/frei-nutzbare-produkte\/Anwendungen\/Kaufpreisaufteilung-Grundstuecke\/Kaufpreisaufteilung-Grundstuecke.html\" rel=\"nofollow\" target=\"_blank\">Go to BMF Tool (Excel &#038; Guide)<\/a>\r\n\t<\/p>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Methods Used in the Tool<\/h2>\r\n\t<h3>Comparative Value Method<\/h3>\r\n\t<p>\r\n\t\tFor single\/two-family homes or condos, if comparable price factors (e.g., \u20ac\/m\u00b2) are available, land and building values can be derived accordingly.\r\n\t<\/p>\r\n\r\n\t<h3>Income Value Method<\/h3>\r\n\t<p>\r\n\t\tUsed for rental properties or when no comparable values exist. As per \u00a7\u202f28 ImmoWertV, this includes rental surplus, standard land value, interest rate, and construction costs.\r\n\t<\/p>\r\n\r\n\t<h3>Replacement Value Method<\/h3>\r\n\t<p>\r\n\t\tUsed as a fallback (under \u00a7\u00a7\u202f35 ff. ImmoWertV), especially for mixed-use properties or where other data is lacking.\r\n\t<\/p>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Step-by-Step Guide for Calculation<\/h2>\r\n\t<ol>\r\n\t\t<li>Enter property data (address, size, year built, features)<\/li>\r\n\t\t<li>Input comparison factors\/land value\/interest rate<\/li>\r\n\t\t<li>Select method (comparative, income, or replacement)<\/li>\r\n\t\t<li>Calculate provisional values<\/li>\r\n\t\t<li>Determine share ratio and allocate total price:<\/li>\r\n\t\t<ul>\r\n\t\t\t<li>Building share = (Building value \/ Total value) \u00d7 Purchase price<\/li>\r\n\t\t\t<li>Land share = (Land value \/ Total value) \u00d7 Purchase price<\/li>\r\n\t\t<\/ul>\r\n\t<\/ol>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Example Calculations<\/h2>\r\n\r\n\t<h3>Example: Comparative Method<\/h3>\r\n\t<p><strong>Data:<\/strong><\/p>\r\n\t<ul>\r\n\t\t<li>Plot size: 1,200 m\u00b2<\/li>\r\n\t\t<li>Standard land value: \u20ac550\/m\u00b2<\/li>\r\n\t\t<li>Living space: 120 m\u00b2<\/li>\r\n\t\t<li>Price per m\u00b2: \u20ac2,880<\/li>\r\n\t\t<li>Total purchase price: \u20ac600,000<\/li>\r\n\t<\/ul>\r\n\t<p><strong>Calculation:<\/strong><\/p>\r\n\t<pre>\r\nLand value = 1,200 \u00d7 550 = \u20ac660,000\r\nBuilding value = 120 \u00d7 2,880 = \u20ac345,600\r\nTotal = \u20ac1,005,600\r\nBuilding share = 34.36% \u2192 \u20ac206,160\r\nLand share = 65.64% \u2192 \u20ac393,840\r\n  \t<\/pre>\r\n\r\n\t<h3>Example: Replacement Value Method (Simplified)<\/h3>\r\n\t<ul>\r\n\t\t<li>Standard construction cost: \u20ac1,800\/m\u00b2<\/li>\r\n\t\t<li>Price index factor: 1.10<\/li>\r\n\t\t<li>Depreciation: (80 \u2013 30)\/80 = 62.5%<\/li>\r\n\t\t<li>Living space: 150 m\u00b2<\/li>\r\n\t\t<li>Land: 500 m\u00b2, land value: \u20ac300\/m\u00b2<\/li>\r\n\t\t<li>Total purchase price: \u20ac500,000<\/li>\r\n\t<\/ul>\r\n\t<p><strong>Calculation:<\/strong><\/p>\r\n\t<pre>\r\nBuilding cost:\r\n1,800 \u00d7 1.10 = \u20ac1,980\/m\u00b2\r\n  \u00d7 62.5% = \u20ac1,237.50\/m\u00b2\r\n  \u00d7 150 m\u00b2 = \u20ac185,625\r\nLand value = 500 \u00d7 300 = \u20ac150,000\r\nTotal = \u20ac335,625\r\nBuilding share = 55.28% \u2192 \u20ac276,400\r\nLand share = 44.72% \u2192 \u20ac223,600\r\n  \t<\/pre>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Risks, Case Law &#038; Criticism<\/h2>\r\n\t<ul>\r\n\t\t<li><strong>Tool under judicial review:<\/strong> FG Berlin\u2013Brandenburg considers it generally suitable, but BFH case IX R 26\/19 raised expert concerns (Jacoby 2020).<\/li>\r\n\t\t<li><strong>Simplification vs. accuracy:<\/strong> The tool uses generalized assumptions, which may ignore regional specifics.<\/li>\r\n\t\t<li><strong>Court review process:<\/strong> Deviations >20% from standard land values may trigger intervention by tax authorities or courts.<\/li>\r\n\t<\/ul>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Practical Tips<\/h2>\r\n\t<ul>\r\n\t\t<li>Include apportionment in the notarial contract (BFH 2015)<\/li>\r\n\t\t<li>Use current standard land values (public databases often available)<\/li>\r\n\t\t<li>If deviation >10\u201320%, consider a professional appraisal<\/li>\r\n\t\t<li>Use the BMF tool to check plausibility (CSV &#038; Excel)<\/li>\r\n\t\t<li>Justify shares using the income or replacement method<\/li>\r\n\t<\/ul>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>Further Links<\/h2>\r\n\t<ul>\r\n\t\t<li><a href=\"https:\/\/www.bundesfinanzministerium.de\/Datenportal\/Daten\/frei-nutzbare-produkte\/Anwendungen\/Kaufpreisaufteilung-Grundstuecke\/Kaufpreisaufteilung-Grundstuecke.html\" rel=\"nofollow\" target=\"_blank\">BMF Tool &#038; Instructions (Jan 2025)<\/a><\/li>\r\n\t\t<li><a href=\"https:\/\/en.wikipedia.org\/wiki\/Apportionment_of_real_estate_purchase_price\" rel=\"nofollow\" target=\"_blank\">Wikipedia (EN)<\/a><\/li>\r\n\t<\/ul>\r\n<\/section>\r\n\r\n<section>\r\n\t<h2>When in Doubt, Get an Appraisal<\/h2>\r\n\t<p>\r\n\t\tThe apportionment ensures that only the depreciable building value is used for AfA. Lawmakers and courts require value-based methods. The BMF tool is helpful but does not replace a professional appraisal in unclear cases. To avoid tax disadvantages: define the apportionment in the notarial deed, use updated data, verify with the tool \u2013 and obtain an appraisal if necessary.\r\n\t<\/p>\r\n<\/section>\r\n\r\n\r\n","protected":false},"excerpt":{"rendered":"<p>When purchasing a developed property, it is essential to correctly apportion the purchase price between the building (&#8220;depreciable&#8221;) and the [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_locale":"en_US","_original_post":"https:\/\/meine-renditeimmobilie.de\/?p=8803","footnotes":""},"categories":[197],"tags":[],"post_folder":[255],"class_list":["post-10314","post","type-post","status-publish","format-standard","hentry","category-taxes","en-US"],"_links":{"self":[{"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts\/10314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/comments?post=10314"}],"version-history":[{"count":1,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts\/10314\/revisions"}],"predecessor-version":[{"id":10315,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts\/10314\/revisions\/10315"}],"wp:attachment":[{"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/media?parent=10314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/categories?post=10314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/tags?post=10314"},{"taxonomy":"post_folder","embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/post_folder?post=10314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}