Depreciation and amortisation (AfA) for properties in the Nuremberg, Fürth, Erlangen, Schwabach and Roth metropolitan region

Depreciation for wear and tear (AfA) is a significant tax advantage for property owners in the metropolitan region of Nuremberg, Fürth, Erlangen, Schwabach and Roth. It makes it possible to claim the acquisition or production costs of a property against tax over a certain period of time. This topic is particularly important for investors and landlords, as it has a direct impact on the tax burden and therefore on the profitability of the property. However, many property owners and prospective buyers are faced with the challenge of correctly understanding the different types of depreciation and their effects.

In this text, you will learn how depreciation for property works, what challenges can arise and how you can make optimum use of depreciation to save tax in the long term.

What is depreciation for wear and tear (AfA) and why is it important?

Depreciation for wear and tear, or AfA for short, refers to the tax deductibility of costs arising from the wear and tear of a property over time. It is a key instrument for reducing the tax burden of property owners and investors, as the acquisition or production costs can be depreciated over a certain period of time. This has a positive effect on the annual tax return and contributes to the long-term increase in the value of the investment.

For properties in the Nuremberg, Fürth, Erlangen, Schwabach and Roth metropolitan region, it is important to know that the exact rules on depreciation depend on various factors, such as the year of construction of the property or the type of use.

Which properties can be depreciated?

Not every property can be depreciated. As a general rule, only properties that are rented out or used to generate income can be depreciated for tax purposes. Owner-occupied properties are excluded from depreciation.

In detail, the following properties can be depreciated:

• Residential properties that are let
• Commercial property
• Mixed-use properties (e.g. residential and commercial buildings)

Different types of amortisation

There are different types of amortisation, which vary depending on the type of property and the year of construction:

• Straight-line amortisationThis means that a constant percentage of the acquisition or production costs is depreciated each year. For residential properties built after 31 December 1924, the rate is 2 % per year over 50 years.
• Degressive amortisationThis was permitted at times in the past, but is currently no longer available for properties.
• Special depreciationUnder certain circumstances, such as in the context of refurbishment measures, special depreciation may be possible, allowing higher depreciation amounts in the first few years.

Example for the calculation of depreciation

To illustrate how depreciation works, let's look at an example:

Let's assume you purchase a rented property in Nuremberg for 300,000 euros. The land value is 50,000 euros, the residual value of the building shares is therefore 250,000 euros. As the property was built after 1924, straight-line depreciation of 2 % per year applies.

Calculation of depreciation: 250,000 euros x 2 % = 5,000 euros annual depreciation.

These 5,000 euros can be deducted annually from your rental income as income-related expenses, which significantly reduces your tax burden.

Tips for optimising the use of depreciation

To make optimum use of the AfA, property owners should bear a few points in mind:

• Exact determination of acquisition costsSeparate the land value from the construction costs, as only the construction costs can be amortised.
• Early planningConsider how the property will be used before you buy in order to maximise the tax benefits.
• Professional adviceConsult a tax advisor to develop the best possible strategy for your property.

You should also use the service of my-home.de to find local experts who can assist you with property valuation and planning your AfA strategy.

Recommendations and next steps

Are you planning to buy or let a property in the Nuremberg, Fürth, Erlangen, Schwabach or Roth metropolitan region? Let a professional expert advise you on my-home.de to fully utilise the potential of depreciation and reduce your tax burden. With an expert assessment and advice, you can ensure that you benefit from the tax advantages in the long term.

In conclusion, depreciation is an indispensable tool for property owners and investors to reduce their tax burden. By making optimum use of depreciation, you can make your property more profitable and benefit financially in the long term.

Q&A - Depreciation and amortisation (AfA) for properties

Use the service of my-home.de, to obtain advice on the best depreciation strategies and optimise your property investment in the Nuremberg, Fürth, Erlangen, Schwabach and Roth metropolitan region.