calculation of depreciation
March 8, 2013 | 25,00 EUR | answered by Dr. Yanqiong Bolik
I took over a house from a forced auction in March 2012. I have been renting it out since August 1, 2012. How do I calculate the depreciation for this property? I have a tax assessment notice from the tax office with a value of 10,379.00 euros and a loan of 32,000 euros.
Dear inquirer,
Thank you for your inquiry, which I am happy to answer considering your input and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of the information can change the tax result. Also, please be aware that this cannot replace individual comprehensive advice.
Based on your description, I assume that you own this property in your personal assets and rent it out for residential purposes. Please inform me if these assumptions are incorrect. The tax consequences may vary.
In general, with buildings, for depreciation of acquisition costs, expenses incurred to acquire an asset and put it into operational condition can be deducted annually at 2 percent of the acquisition costs until full depreciation (§7 Abs. 4 S. 1 Nr. 2a EStG). If the actual useful life of a building is less than 50 years, depreciation for wear and tear corresponding to the actual useful life can be applied. You first need to determine the acquisition costs of the building (not the unit value or loan principal amount). Acquisition costs include expenses incurred to acquire the property and put it into a rentable condition, as long as they can be individually allocated to the property. This usually includes purchase price minus any reductions, plus attributable ancillary acquisition costs (notary fees, land registry entry, etc.), plus subsequent acquisition costs. These acquisition costs must be allocated to the building and land. The portion for the building is the basis for depreciation calculation, which should be linearly distributed over the building's useful life.
I hope this information was helpful.
If there is still any confusion, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 2132 1815
Email: steuer@zdbz.de
www.steuerberatung.zdbz.de
