Do you want to claim special depreciation for the construction of new rental apartments?
Description
Select Yes if you want to enter special depreciation for the object in accordance with sect. 7b of the Income Tax Act (EStG) (new rental property construction).
According to sect. 7b of the Income Tax Act (EStG), you can claim special depreciation of up to 5% of the tax base per year in addition to the linear depreciation for wear and tear according to sect. 7 para. 4 of the Income Tax Act (EStG) for the acquisition or construction of new flats in the year of acquisition or construction and in the following three years.
Construction measures that create new, previously non-existent flats on the basis of a building application submitted after 31 August 2018 and before 1 January 2022 or a building announcement made during this period are favoured. For rental flats that can be built without a building application or building notification according to the building regulations, the time period mentioned can be based on the time of the start of construction (Federal Ministry of Finance (BMF) letter dated 21.09.2021, IV C 3 - S 2197/19/10009 :009).
The prerequisite for the claim is that
- the flat is situated in a member state of the European Union, and
- the acquisition or construction costs of this flat do not exceed 3.000 Euro per square metre of living space and
- the flat is made available for residential use against payment in the year of acquisition or construction and in the following nine years.
The assessment basis for special depreciation may not exceed 2.000 Euro per square metre of living space. The special depreciation according to sect. 7b of the Income Tax Act (EStG) is a de minimis subsidy. It is only granted if the requirements of the de minimis regulation are met. For this purpose, the information on the amount of further de minimis subsidies that you have received in the previous two assessment periods as well as in the current assessment period is required.
Depreciation for building applications between 01.01.2023 and 31.12.2026: The special depreciation under sect. 7b of the Income Tax Act is intended to incentivise the construction of rental flats. In detail, the following now applies:
- Rental flats for which the building application is submitted between 1 January 2023 and 31 December 2026 or a corresponding building notification is submitted are entitled.
- The special depreciation amounts to 5 percent of the acquisition or production costs up to the eligible assessment basis in each of the first four years. In addition, straight-line depreciation of 2 percent p.a. is deductible, although this is based on a different assessment basis, namely the actual acquisition or production costs.
- Acquisition or production costs of up to 2.500 Euro per square metre of living space are eligible under sect. 7b of the Income Tax Act (EStG).
- Buildings with construction costs of no more than 4.800 Euro per square metre of living space are eligible under sect. 7b of the Income Tax Act (EStG).
- The purchase of such a flat is eligible if the purchaser legally acquires the building or the new flat by the end of the year of completion.
To qualify for the special depreciation allowance, the requirements for the home are linked to certain efficiency standards. For example, the utilisation of the special depreciation allowance is dependent on the building in which the new home is constructed fulfilling the criteria for an "Efficiency House 40" with sustainability class/efficiency building level 40.
Tip: In view of the dynamic and difficult-to-predict development of construction costs in particular, there may be a need to amend the cost reference values (2.500 Euro / 4.800 Euro) in the future. The legislator has already pointed this out in the explanatory memorandum to the law.
Tip: The requirements for so-called de minimis aid must be met. However, the rules on compliance with the de minimis regulation are limited to beneficiaries who generate profit income and are therefore engaged in business activities. This means that beneficiaries with income from renting and leasing do not have to comply with the requirements of state aid law.
Tip: New flats that are built in 2022 on the basis of a building notification or a building application are excluded from the scope of application of sect. 7b of the Income Tax Act (EStG).
