Old buildings are something very special.
There is usually a lot of history in the walls, but the special architecture, room layout and construction techniques used, along with the materials used, also provide the special charm of historic buildings. Many of these gems no longer exist. Those that still exist must be well preserved through monument protection and protected from decay and destruction. Depreciation means tax savings for the buyer.
In detail:
Investors as well as owner-occupiers can considerably reduce their income tax burden within the framework of their income tax assessment. By means of special depreciation or special expenses according to §§ 7h and 10f EstG in the amount of the total production costs, taxes can be saved according to the individual tax rate and thus remain in the private assets. Capital investors (landlords) may claim 9% of the renovation and refurbishment costs via special depreciation in the first eight years and 7% in the remaining four years and additionally write off 2.5% on the old substance for 40 years. If the property buyer uses the property himself, depreciation of 9% per year of the total construction costs remains deductible for a period of ten years (§10f EStG). The amount of the special depreciation is determined by the expenses or construction costs for renovation and refurbishment, which are necessary and reasonable for the preservation of the residential property. Since the time of the conclusion of the purchase contract is decisive for the start of depreciation, all work or renovation and refurbishment costs starting from this time are deductible. All costs incurred through renovation and refurbishment prior to the conclusion of the purchase agreement do not flow into the depreciation. The amount is determined after completion by a decision of the competent authority. Monument protection also means that the authorities clearly specify which renovation and refurbishment work may be carried out and what it must look like.
