Consideration of a new construction apartment before completion
July 18, 2020 | 25,00 EUR | answered by Steuerberater Knut Christiansen
Consideration of a new construction apartment before completion
In 2018, I purchased a condominium from a property developer that was still under construction at the time. The intention was for personal use. To this day, the apartment has not been completed, and there are significant issues with the property developer.
In 2018 and 2019, various expenses were incurred, such as for craftsmen, lawyers, travel expenses, etc. I am now planning to rent out this apartment after completion.
1) Should anything be considered in the tax return for 2019 regarding the apartment? Or will the offsetting of purchase costs etc. only occur in the year when rental income is generated?
2) Are there "statutes of limitations" for expenses related to the apartment, such as legal fees in 2018 and 2019? By when must these be claimed at the latest?
Hello and thank you for using frag-einen.com!
I would like to answer your question as part of an initial consultation.
In general, costs within the scope of private income categories are always to be considered in the year of payment, unless they are acquisition or production costs. These costs are depreciated only upon completion/usability when generating income (new properties at 2% per year). These costs include especially the costs for building construction or (proportional) acquisition ancillary costs (real estate transfer tax, notary, broker, etc.).
If you have already incurred ongoing costs such as interest, insurance, land costs (property tax), or legal fees before completion, these costs must be declared as advertising expenses on appendix V in the year of payment. For 2019, it would still be possible to deduct these costs, if there is no tax assessment yet that has become final. For 2018, the costs can only be considered if there is no assessment yet or if it has not become final. If the assessment for 2018 is already available but not yet final (not older than 1 month or issued subject to review), you can request from the tax office to still claim these costs.
I hope I have answered your question, otherwise feel free to contact me again.
Best regards,
Knut Christiansen
Tax consultant
