Depreciation of a new fitted kitchen
August 21, 2015 | 30,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges
Dear Sir or Madam,
In 2014, we renewed the fitted kitchen in our rented condominium. The invoice amount was approximately €6,300. The condominium has been in our ownership since 2002 and has been rented out since 2007. The old kitchen was installed in 1992 by the previous owner and was acquired by us at that time.
How can we claim tax deductions for the new kitchen? We have already researched that a distinction is made between the stove and sink, as well as other items in the kitchen.
However, we only have a total invoice from the kitchen supplier, without the individual components of the kitchen and their individual prices being specified. According to information from the kitchen supplier, it is not possible to provide individual prices because a so-called block settlement has already been made by the manufacturer/wholesaler, in which individual prices cannot be specified.
What should our next steps be? Is it possible to work with lump sum amounts for the stove + sink, other electrical appliances, or the remaining furniture? What depreciation periods should we use, and what expenses can we immediately claim in full?
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into consideration your contribution and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing the information or the ambiguity of the information can change the tax result. Please also note that this individual comprehensive advice cannot replace a full consultation.
In principle, a fitted kitchen is not a single asset and therefore not a single economic item. Therefore, the built-in furniture (including the work surface), the sink, the stove, and the other electrical appliances (e.g. refrigerator and extractor hood) must be evaluated separately for tax purposes.
You can claim the expenses for sinks and stoves as maintenance expenses of the building in the calendar year of acquisition in full as advertising costs in the context of determining rental and leasing income (§ 9 paragraph Income Tax Act (EStG)).
Expenses for replaceable electrical appliances (e.g. refrigerator and extractor hood) as well as built-in furniture (including worktop) represent acquisition costs that you can take into account as depreciation (AfA) over the usual useful life on a time-proportional basis as advertising costs (§ 9 paragraph 1 sentence 3 no. 7 EStG). If the acquisition costs of individual assets are below the amount of 410.00 EUR (excluding VAT), these assets are considered low-value assets. The expenses for low-value assets can be claimed as advertising costs in the calendar year of acquisition (§ 6 paragraph 2 sentence 1 EStG). The usual useful life for electrical appliances is 5 years. The usual useful life for built-in furniture is 10 years.
To determine the expenses for the individual assets, the total purchase price of the fitted kitchen amounting to 6,300.00 EUR must be allocated to the individual components of the kitchen (assets). Since the seller of the kitchen did not provide a detailed invoice, the allocation of the total purchase price to the components of the fitted kitchen can only be done through a reasonable estimate. For the sink, the stove, and the other electrical appliances, average prices (e.g. via the internet) must be determined. The remaining amount then applies to the kitchen furniture (including worktop).
Sincerely,
Dipl.-Kfm. Frank-Olaf Illiges
Tax consultant
Am Wieksbach 55
33378 Rheda-Wiedenbrück
Phone: 05242/4055666
Fax: 05242/4055677
e-mail: office@illiges-steuerberatung.de
Website: www.illiges-steuerberatung.de
