What is depreciation and what are the methods?


One Depreciation refers to the loss or diminution in value of various assets, such as real estate. As a consumer, you can claim this loss of value against tax.

When calculating the annual sum of the Depreciation the non-recurring production or acquisition costs of the object are taken and distributed over the useful life of the object. There are two types of Depreciation: the linear and the declining Depreciation.

With the linear Depreciation always the same amounts are claimed, whereas the sums in the case of the degressive Depreciation are initially higher and become lower over time.

Whether the property is equipped with a real estate loan purchased or self-built, affects the assessment basis of the annual Depreciation. If the property was self-built, the production costs serve as the basis. If the property was purchased, the acquisition costs play a role. As a rule, only the home builder has the option of choosing between the two Depreciationmethods to choose from. Homebuyers can usually only use the linear Depreciation use, unless they purchased the property in the year of completion.

Depreciation from January 2023 for new buildings

Thereby amounts the depreciation for New building as of 1. January 2023 to 3 percent. New buildings completed before this date can only be used with 2 percent be depreciated.

Alternatively, can claim special depreciation for four years - 5 percent of the building costs each time, up to a limit of 100 euros per square meter of living space.

How high is the AfA for monument protection?

Monument AfA amounts to if rented: 9 % per year for eight years and 7 % for each additional four years. Monument depreciation is for owner-occupancy: Ten years with annual 9 %. Depreciation only for buildings classified as monuments by the monument authority.

Depreciation for old buildings

For privately rented properties built before 1924, an annual depreciation rate of 2.5 percent on the acquisition costs. These are thus recognized over 40 years linear depreciated.

Depreciation for all other buildings

All other buildings are depreciated at 2 % annually over 50 years.

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