Real estate depreciation from 2023
New regulation from 2023
The Annual Tax Act 2022 increased annual depreciation from 2% to 3% of acquisition and construction costs for residential properties completed after December 31, 2022. A residential property is deemed to be completed as soon as the essential construction work has been completed and the property is habitable.
Special Depreciation § 7b EStG
Special depreciation allowances under Section 7b of the German Income Tax Act (Einkommensteuergesetz/EStG) have been linked to new efficiency requirements in terms of energy saving, in addition to the previous requirements. Special depreciation allowances can now only be claimed for apartments built between 2023 and 2026 if the apartments meet the criteria for an efficiency house 40 with sustainability class/efficiency building level 40. Higher maximum acquisition or production costs apply to these apartments. These may amount to up to € 4,800.00 per square meter in order to be eligible for the special depreciation allowance. The special depreciation remains unchanged at 5% per year of the relevant assessment basis. The maximum assessment basis for efficiency buildings is € 2,500.00 per square meter of living space. For other dwellings, the maximum assessment basis remains unchanged at € 2,000.00. Acquisition or production costs exceeding this amount cannot be claimed under the special depreciation allowance.
Depreciation according to a shorter useful life
Furthermore, real estate owners can also achieve a higher standard annual depreciation rate than the newly applicable 3% under the Act for properties manufactured from 2023 onwards if evidence is provided that the useful life of the real estate property is shorter than the 33 years resulting under the Act. An initially intended deletion of this possibility was not implemented in the legislative process for the JStG 2022.
Status: January 27, 2023
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