Are there also acquisition-related production costs that are immediately deductible in the case of new construction?
January 20, 2013 | 25,00 EUR | answered by StB Steffen Becker
I bought a terraced house - new construction. I had it redesigned by the developer from the original plans into a 2-family house for partial rental. The costs for this are included in the construction contract for the house. After the purchase contract was completed, there were additional changes and I have a lot of invoices for materials, etc. since I painted the walls myself, laid the floors myself (parquet), and did some of the tiling work myself.
Are there acquisition-related production costs for the rented portion in new construction? If so, when does the 3-year period begin? From the date of the purchase contract or from the date of the house handover? The invoices incurred after the purchase contract are less than 15% of the building costs.
Dear inquirer,
Thank you for your inquiry. I will answer this within the scope of an initial consultation based on the information provided. Missing or incorrect information can affect the legal outcome.
Acquisition-related production costs exist, as the name suggests, only in connection with the acquisition of a building (§ 6 para. 1 no. 1a.) EStG).
After the completion of a house or an apartment, production costs arise (subsequent production costs!), if you expand your existing rental property through construction measures or significantly improve it beyond its original condition (§ 255 para. 2 sentence 1 HGB; BMF letter of 18.7.2003, BStBl. 2003 I p. 386). Production costs must generally be included in the building depreciation.
However, there is an exception: if production costs are incurred, an immediate deduction is permissible for costs of a single construction measure of up to 4,000 € (invoice amount without VAT), R 21.1 para. 2 sentence 2 EStR 2008:
"After the completion of the building, production costs are assumed if expenses arise through the consumption of goods and the use of services for the expansion or for the significant improvement of a building beyond its original condition (§ 255 para. 2 sentence 1 HGB). If the expenses after the completion of a building for the individual construction measure do not exceed 4,000 euros (invoice amount without VAT) per building, this expense is always to be treated as maintenance expenses upon request. However, the simplification rule does not apply to expenses that serve the final completion of a newly constructed building."
I recommend that you also carefully read the BMF letter of 18.7.2003, BStBl. I p. 386 (http://treffer.nwb.de/content/dms/content/000/088/Content/000088567.asp) and the decree of the OFD Munich of 11.6.2004, DStR 2004 p. 1338 (http://treffer.nwb.de/content/dms/content/000/133/Content/000133628.asp).
I hope this information has been helpful.
Best regards,
Steffen Becker
-Tax consultant-
stb-becker@arcor.de
