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).

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 4.000 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 5.200 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 (4.000 Euro / 5.200 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).

Enter a description of the special depreciation in accordance with sect. 7b of the Income Tax Act (EStG) (new rental housing construction) for the property.

If the depreciation has changed compared to the previous year or is being claimed for the first time, please provide detailed information about the acquisition costs, useful life and other relevant details in the "Explanation" field.

In this field, select how the depreciation for the object is calculated. You have two options:

according to the explanation:

Choose this option if the depreciation is being carried out for the first time in the current year or if it has changed compared to the previous year.

as in the previous year:

This option should be selected if the depreciation is to be taken over unchanged, in other words, there are no changes to the costs, service life or method of calculation.

Example: You continue the linear depreciation from the previous year without adjustments or special rules.

Information on newly built rental flats for which special depreciation is claimed in accordance with sect. 7b of the Income Tax Act (EStG) is required in the "Explanation" field.

Required information:

• Acquisition costs: total costs (including construction and service charges).
• Date of completion: Date of readiness for move-in.
• Useful life: Linear depreciation (2%) plus special depreciation (5% per year for a maximum of 4 years).
• Requirements: planning application between 1 September 2018 and 31 December 2026, compliance with the upper construction cost limit (max. 4.800 Euro / m² of living space).

Total special depreciation allowances for new rental housing according to section 7b Income Tax Act (EStG)

Total of the special depreciation claimed for buildings.