Shorter useful life now easier to prove
On December 1, 2025, the German Federal Ministry of Finance (BMF) revoked its February 22, 2023, guidance letter. The strict requirements for proving a shorter remaining useful life for buildings no longer apply. Owners of existing properties can now claim higher depreciation (AfA) with less administrative burden.
Legal background
Under Section 7(4) of the German Income Tax Act (EStG), residential buildings have a standardized useful life of 50 years (2 percent depreciation per year). Buildings completed after 2022 qualify for a shorter period of 33 years (3 percent). If the actual remaining useful life is shorter, owners may claim a higher depreciation rate. The Federal Fiscal Court ruled in 2021 (case IX R 25/19) that any suitable method of proof is permissible.
What has changed
The revoked 2023 BMF guidance required appraisals from publicly appointed or ISO-17024-certified experts. This restriction no longer applies. Any method that plausibly demonstrates technical wear, economic decline, or legal use restrictions is now accepted. Appraisals based on the German Real Estate Valuation Ordinance (ImmoWertV) are recognized again.
Example calculation
For an apartment building (Mehrfamilienhaus) with a building value of 2.4 million euros:
- Standard depreciation (50 years): 48,000 euros per year
- Depreciation at 25 years remaining useful life: 96,000 euros per year
- Additional tax benefit at a 42 percent tax rate: 20,160 euros per year
When is an appraisal worth it?
A remaining useful life appraisal costs between 500 and 2,000 euros depending on the property size. For building values of 500,000 euros or more, the appraisal pays for itself in the first year. Particularly suitable are pre-1960 buildings, properties without major renovation, and buildings with visible modernization backlogs.
The change applies to all open tax cases. Owners can also request amendments for previous years, provided the tax assessments are not yet final.
What owners should do now
If you own an apartment building or are looking to buy one in Berlin, you should have the option of higher depreciation reviewed. If you plan to sell your apartment building in Berlin over the medium term, a remaining-useful-life appraisal also documents the property's tax structure transparently. The proof requirements have been significantly reduced since December 2025. For older buildings with low modernization levels, the appraisal typically pays for itself within the first year.
If you are getting a property valuation, you can have the remaining useful life assessed at the same time.
Disclaimer
This article is for general information only and does not constitute tax or legal advice. The content does not replace individual consultation with a tax advisor or attorney. No liability is assumed for accuracy or completeness.
