How does the depreciation for wear and tear (AfA) work for commercial properties?
March 20, 2022 | 40,00 EUR | answered by Ulrike Voss
Dear tax lawyer,
my name is Sebastian Freudenberger and I am the owner of a commercial property. Lately, I have been researching the topic of depreciation (AfA) extensively, as I would like to fully utilize my tax options. However, I am unsure of how exactly depreciation works for commercial properties and what requirements need to be met in order to claim it.
Currently, I hold the property as business assets and use it for renting out commercial spaces. I am aware of the acquisition costs of the property as well as any renovation and modernization costs, but I lack understanding of the tax aspects related to AfA.
My concerns lie in the possibility of me missing out on tax benefits, as I am not sure how to correctly apply for and claim depreciation. Additionally, I want to ensure that I do not make any mistakes in the tax depreciation process that could cause issues with the tax authorities in the future.
Therefore, my question to you is: Could you please explain in detail how depreciation for commercial properties works? What depreciation rates apply and under what conditions can I claim depreciation? Are there specific deadlines or requirements that I need to consider in order to optimally utilize the tax benefits of depreciation?
Thank you in advance for your help and expertise in this matter.
Sincerely,
Sebastian Freudenberger
Dear Mr. Freudenberger,
Thank you for your inquiry regarding depreciation allowances (AfA) for commercial real estate. As a tax lawyer, I would like to explain in detail how AfA works and what requirements you must meet in order to claim it.
AfA is a tax depreciation option that allows you to claim the loss in value of your commercial property over time for tax purposes. You can depreciate the acquisition and production costs as well as the acquisition-related production costs of the property over its useful life. The average useful life for commercial real estate is typically 33 years. This means that you can spread the acquisition cost of the property over this period.
AfA is calculated in the form of depreciation rates that are legally set. For commercial real estate, the AfA rate is usually 2% per year. This means that you can claim 2% of the acquisition and production costs of the property as operating expenses each year.
In order to claim AfA, you must hold the property in business assets and use it for business purposes. This is the case for you as you are renting out the commercial property. It is important to calculate AfA correctly and include it in your tax return. You should also take into account any renovation and modernization costs in the calculation.
There are no specific deadlines to claim AfA. You can declare the depreciation in your tax return every year as long as you are using the property for business purposes.
I recommend seeking assistance from a tax advisor or a tax law expert when calculating AfA to ensure that you can maximize all tax benefits and avoid any mistakes in depreciation.
I hope this information was helpful to you. If you have any further questions, please feel free to contact me.
Sincerely,
Ulrike Voss
