https:\/\/www.bundesrat.de\/SharedDocs\/drucksachen\/2024\/0301-0400\/369-1-24.pdf?__blob=publicationFile&v=1<\/a>\r\n\t<\/p>\r\n\t\r\n\t\tThe draft proposes that a shortened useful life should only have tax implications if it is less than a staggering 20% of the standard useful life.\r\n\t<\/p>\r\n\t
\r\n\t\tWhether this significant disadvantage for property buyers will take effect remains to be seen. We do not believe it will pass in this form. Particularly the “valid for tax purposes only if under 20% of the standard useful life” rule seems likely to be overturned by courts as disproportionate. \r\n\t<\/p>\r\n\t
\r\n\t\tHere is a quote from the draft law linked above: “In current taxation practices, it has become evident that any report (even by non-official experts, other individuals, or simple ‘internet reports’) is accepted as evidence, turning the exception into the rule. To counter this …”<\/em>\r\n\t<\/p>\r\n<\/section>\r\n\r\n\r\n\tNot Always Positive: Depreciation Increases Capital Gains<\/h2>\r\n\t
\r\n\t\tA rarely considered and potentially negative consequence of depreciation (AfA) in real estate is that, in the case of a taxable property sale \u2014 such as a sale within 10 years of purchase without further tax-relieving circumstances \u2014 the depreciation already claimed reduces the property\u2019s value and thus increases the capital gain and, consequently, the tax burden.\r\n\t<\/p>\r\n\t
Example of Increased Tax Due to Depreciation in a Sale<\/h3>\r\n\t
\r\n\t\tThe purchase price of the property, including land, was \u20ac500,000, of which \u20ac350,000 was allocated to the building. The property is sold after seven years for \u20ac650,000. \r\n\t<\/p>\r\n\t
\r\n\t\tThe building was depreciated at 2% per year for seven years. The sales proceeds are now not<\/em> \u20ac650,000 – \u20ac500,000 = \u20ac150,000. Due to the depreciation of 7 x 2%, the building lost 14% of \u20ac350,000 = \u20ac49,000 in value. This increases the gap between purchase price\/value and selling price, i.e., the gain.\r\n\t<\/p>\r\n\t\r\n\t\tThe sales proceeds are now \u20ac650,000 – (\u20ac500,000 – \u20ac49,000) = \u20ac199,000. Instead of \u20ac150,000, \u20ac199,000 must be taxed as sales proceeds.\r\n\t<\/p>\r\n\t
\r\n\t\tSuch a situation should ideally be avoided, as it means missing out on opportunities for tax optimization in real estate sales.\r\n\t<\/p>\r\n\t
\r\n\t\tIf a taxable sale must occur, the above effects of AfA should be considered in the planning phase.\r\n\t<\/p>\r\n<\/section>\r\n\r\n\r\n\tTax Advantage in Real Estate: “Profit” (Tax Savings Through AfA) Is Also Freely Retained in Tax-Free Sales<\/h2>\r\n\t
\r\n\t\tThe issue described earlier regarding taxable early sales illustrates another tax advantage in real estate:\r\n\t<\/p>\r\n\t
\r\n\t\tIn an early sale, the economic advantage of AfA is effectively reversed. Initially, tax savings are achieved through building depreciation. \r\n\t<\/p>\r\n\t
\r\n\t\tHowever, when the property is sold before the speculation period, the book loss of the building becomes a book gain. The depreciation claimed is deducted from the purchase price, increasing the sales proceeds and, consequently, the tax liability. \r\n\t<\/p>\r\n\t
\r\n\t\tHowever, if the speculation period is observed, both the direct gain from the sale price minus the purchase price and the tax gain through AfA are excluded and are not taxed as book gains.\r\n\t<\/p>\r\n<\/section>\r\n\r\n\r\n\tStandard Useful Life Assessments at Meine-Renditeimmobilie<\/h2>\r\n\t
\r\n\t\tAt Meine-Renditeimmobilie, we have experience with useful life assessments and regularly commission them for our clients. \r\n\t<\/p>\r\n<\/section>\r\n\r\n\r\n","protected":false},"excerpt":{"rendered":"
If it is possible to reduce the theoretical remaining useful life of a property through expert assessments, the annual depreciation […]<\/p>\n","protected":false},"author":16,"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=8777","footnotes":""},"categories":[197],"tags":[],"post_folder":[228],"class_list":["post-9633","post","type-post","status-publish","format-standard","hentry","category-taxes","en-US"],"_links":{"self":[{"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts\/9633","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\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/comments?post=9633"}],"version-history":[{"count":2,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts\/9633\/revisions"}],"predecessor-version":[{"id":9634,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/posts\/9633\/revisions\/9634"}],"wp:attachment":[{"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/media?parent=9633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/categories?post=9633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/tags?post=9633"},{"taxonomy":"post_folder","embeddable":true,"href":"https:\/\/meine-renditeimmobilie.de\/wp-json\/wp\/v2\/post_folder?post=9633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}