Maintenance expenses for home office
September 4, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
We will purchase the terraced house that we have been renting from the current owner for the past three years next week. Over the next 3 years, we would like to fully utilize the 15% threshold of the acquisition costs by replacing the 40-year-old windows, the heating system, and possibly insulation (no standard leap, no expansion). This means that we want to treat these energy efficiency measures as immediate deductible maintenance expenses rather than acquisition-related production costs, as I can proportionally deduct maintenance expenses for my home office as a freelance lecturer.
Question 1
If we carry out one of the above-mentioned maintenance measures (windows) within one year, can we depreciate it (proportionally for the home office) over 2-5 years (as with rentals) or does the home office portion have to be fully deducted as advertising costs in the same year?
Question 2
The most urgent repair measure is the waterproofing of the basement. We already have an offer from a company for this. We want to avoid that the waterproofing costs count towards the 15%, so we want to include a clause in the purchase contract stating that the seller/landlord will still cover this repair. We would increase the purchase price by the (rounded) amount of the existing cost estimate. The waterproofing should take place this month, after the notary appointment but before the payment of the purchase price or the registration in the land register. We will continue to pay rent until November. How can this be best arranged in the purchase contract? Is this even possible in principle, or does the current owner/landlord risk not being able to deduct the renovation costs as advertising expenses (too close to the sale)?
Dear questioner,
Thank you for your inquiry, which I will gladly answer taking into account your input and the rules of this platform.
Please note that my response is based on the information provided, and that adding, omitting, or changing details can alter the tax-related outcome.
Regarding Question 1
To answer this question, it must first be determined whether we are discussing your home office or your home office workplace. Based on your information, I assume that you do not have any other workplace available besides this home office. Therefore, it is likely that a home office workplace is present. It is important to note that a business office is always necessary business assets. In this case, maintenance costs, to the extent that they are not classified as acquisition/construction costs or as acquisition-related expenses according to § 6 para. 1 no. 1a EStG, are to be considered as operating expenses in the expenditure year.
According to § 82b EStDV, larger expenses for building maintenance can be distributed evenly over two to five years if these buildings do not belong to business assets at the time of the maintenance measure and primarily serve residential purposes (e.g., rental for residential purposes).
Regarding Question 2
If the seller covers the costs for dehumidification, he can only deduct the expenses as advertising costs if they serve the acquisition, security, and maintenance of taxable income.
If the dehumidification measure is carried out to secure rental income, the landlord can deduct the expenses as advertising costs. However, if the obligation to carry out dehumidification is fixed in a sales contract and the work is carried out after the notary appointment, it is more likely to be a measure to achieve the selling price. In this case, the landlord (seller) can only claim the costs as advertising costs if a private sale transaction is involved (i.e., sale of a property held in private assets within the 10-year holding period). If the property is in the business assets of the landlord/seller, he can deduct the incurred costs as operating expenses.
I hope this overview was helpful to you.
If there are still uncertainties, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax consultant
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 9332 2657
Email: info@zdbz.de
