(2024) How is owner-occupied property subsidised under section 10f of the Income Tax Act?

According to § 10f EStG, expenses for urban development measures as defined in § 177 of the Building Code are eligible if they are incurred for buildings in a formally designated redevelopment or development area. The same applies to measures that serve the preservation, renewal, and functional use of a building that is to be preserved due to its historical, artistic, or urban significance, and for which the owner has committed to certain modernisation measures with the municipality. Proof is required through a certificate from the relevant municipal authority that you have carried out building measures in the specified sense and have borne the costs yourself.

Similarly, expenses for building measures on listed buildings can be deducted as special expenses in the aforementioned manner if the conditions are proven by an official certificate. You can consider the tax benefit under § 10f EStG after the completion of the building measure.

If the property is co-owned (except for spouses/partners), enter your share of the deduction amount here.

The deduction amounts under § 10f EStG can only be claimed for one building. Spouses/partners who are not permanently separated in Germany can claim the benefit for a total of two buildings. You cannot claim the deduction amount if increased depreciation under §§ 82g, 82i of the Income Tax Implementation Regulation for building measures completed after 31.12.1986 on a self-occupied building have been considered as special expenses (object restriction).

The Federal Fiscal Court has ruled that the tax benefit of § 10f EStG can only be used for one property and once in a lifetime. This occurs when the benefit is claimed, and § 10f para. 3 EStG prevents the use of the benefit for multiple properties in different assessment periods (BFH ruling of 24.5.2023, X R 22/20).

The claimant had used the tax benefit under § 10f EStG for maintenance measures on his home. The expenses extended from 2006 to 2013. In 2014 and 2015, he applied again for the benefit for another apartment, which was also listed. The tax office refused the deduction because the benefit can only be used for one property, which had already been done for the first apartment.

The BFH argues that according to § 10f EStG, the taxpayer can only claim the deduction amounts for "one" building. It is not possible to deduct them later for another building, and unused parts of the benefit period may be lost.