If you are planning to buy a rental property, you should allocate as much of the total purchase price as possible to the building at an early stage. Because:
✔️ Only the costs of the building are depreciable.
❌ The costs of land and property are not tax deductible!

How do you increase your depreciation now?

Have the total purchase price split between the building and the land included in the purchase contract.
The tax office must generally accept your division! It may only deviate from this if:

🔹 the division does not appear economically viable,
🔹 there is an abuse of tax planning or
🔹 the real value ratios are grossly misrepresented.

So make the most of your leeway!

The tax office checks the breakdown in the notarized purchase agreement using a calculation tool from the Federal Ministry of Finance:
the "Work aid for purchase price allocation". This tool is openly accessible on the Internet and has just been updated.
If your apportionment differs by less than 10 % from the official calculation, it will generally be accepted by the tax office.

What are you waiting for? 😉 Reach the 10-% limit.

And if you're not currently planning to buy a house - share this information with your friends. 😊

👉 Are you looking for a tax expert who understands you and can provide targeted advice? Then get in touch with us. We will be happy to assist you with your tax questions and concerns: https://wsb-berater.com/kontakt

#Property purchase #Purchase price breakdown #Notarized contract #Letting #Depreciation #Tax tips #WSB