Field help: (2024) Type of depreciation

Select whether you want to depreciate the asset using the linear method in accordance with sect. 7 para. 4 of the Income Tax Act (EStG) or the degressive method in accordance with sect. 7 para. 5 of the Income Tax Act (EStG).

Linear or degressive?

• Linear depreciation (sect. 7 para. 4 Income Tax Act):
  With linear depreciation, the value of the building is depreciated evenly over its entire useful life.
• Degressive depreciation (sect. 7 para. 5 Income Tax Act):
  Here, depreciation is calculated using decreasing amounts, which are calculated from the respective residual value. This allows for higher depreciation in the early years.

Depreciation of residential buildings (sect. 7 para. 5a of the Income Tax Act (EStG))

A new regulation for rented residential buildings has been in force since 1 October 2023:

• You can make a degressive depreciation of 5% of the respective residual value.
• Prerequisite:
  • The building is constructed between 1 October 2023 and 30 September 2029 or the purchase contract is concluded during this period.
  • The building must be purchased by the end of the year of completion.