Remaining useful life report
German tax law usually assumes 50 years. Your building may not last that long.
After a first look at the year of construction, condition and modernisation, I will tell you whether a shorter useful life can be justified – before you commission a report.
Jens Krüger · Let’s talk: +49 172 868 5666
For tax purposes, buildings are depreciated over a useful life standardised by law. If a building can actually be used for a shorter period, depreciation can be based on the shorter actual useful life – provided this is proven. A remaining useful life report derives, as an expert assessment, which useful life can be justified for your building.
Germany-wide, with a site inspection and a property-specific structural assessment. Before you instruct me, you receive a first assessment of whether a shorter useful life is likely to be justifiable.
What is a shorter actual useful life about?
The German Income Tax Act (EStG) prescribes fixed depreciation rates for buildings. For buildings that are not commercial buildings held as business assets – typically let residential property – the rates under § 7(4) sentence 1 no. 2 EStG are:
- 3% per year for buildings completed after 31 December 2022,
- 2% per year for buildings completed after 31 December 1924 and before 1 January 2023,
- 2.5% per year for buildings completed before 1 January 1925.
These rates reflect standardised useful lives of around 33, 50 and 40 years. If a building’s actual useful life is shorter, depreciation can be based on the actual useful life under § 7(4) sentence 2 EStG. The burden of proof lies with the taxpayer; an expert report is the usual way of providing it.
For commercial buildings held as business assets, a rate of 3% per year applies under § 7(4) sentence 1 no. 1 EStG; here, too, a shorter actual useful life can be proven.
This makes let flats, houses, apartment buildings, mixed-use buildings and commercially used buildings potential candidates. It is particularly relevant for older buildings, buildings with little modernisation or with a noticeable maintenance backlog. For owner-occupied homes, building depreciation generally plays no role.
What the case law requires
- Federal Fiscal Court (BFH), judgment of 28 July 2021 – IX R 25/19: the taxpayer may use any method of presentation that appears suitable in the individual case to provide the evidence. A building fabric survey is not a prerequisite.
- Federal Fiscal Court (BFH), judgment of 23 January 2024 – IX R 14/23: a report that derives the remaining useful life on the basis of the models of the German Property Valuation Ordinance (ImmoWertV) can provide the evidence. However, merely referring to model values is not sufficient; the individual circumstances of the property – such as repairs and modernisation carried out or not carried out – must be taken into account.
- Tax authority position: the Federal Ministry of Finance (BMF) circular of 22 February 2023, which had set considerably stricter requirements for the evidence, was revoked by BMF circular of 1 December 2025.
This summary reflects the legal position in force in October 2026 and does not replace tax advice.
How the report is prepared
- Preliminary check: based on the year of construction, property type, modernisation and documents, I assess whether a shorter useful life is likely to be justifiable. If not, I tell you before you instruct me.
- Site inspection and structural assessment: inspection of the building, condition of the main building components, degree of modernisation, maintenance backlog and visible damage, with photo documentation.
- Derivation: determination of the remaining useful life on the basis of recognised valuation models, taking into account the individual technical and economic circumstances of the property.
- Report: clear written documentation of the actual remaining useful life as at the relevant tax date, which is agreed before the instruction.
I carry out site inspections throughout Germany. Travel costs are included in the individual quotation.
Which documents are needed?
- Purchase contract or evidence of acquisition or completion
- Details of year of construction, construction type and property type; existing building plans and floor plans
- Living or usable area figures
- Modernisation carried out, with year and scope, if possible with invoices or other evidence
- Known damage, defects or upcoming repairs
- Energy performance certificate, if available
- For let properties: rent schedule
If individual documents are missing, we will work out together how they can be replaced.
Acceptance by the tax office
The tax office decides whether to accept a shorter useful life – in the event of a dispute, the fiscal court. The report is the evidence: it must set out the derivation in a way that is comprehensible and specific to the building in question.
The result follows the building, not the depreciation you would like. If a shorter useful life cannot be justified, the report will say so – or you will find out at the preliminary check. No expert can promise a particular remaining useful life or acceptance by the tax authorities.
Expert report, yes – tax advice, no
I prepare the expert derivation of the remaining useful life. Whether a report pays off for you in tax terms, how depreciation is calculated, from which assessment period the shorter useful life can be applied and how it is claimed with the tax office are matters to clarify with your tax adviser.
If you wish, I am happy to liaise directly with your tax adviser.
Frequently asked questions about the remaining useful life report
Is a remaining useful life report worthwhile for my building?
Indicators are an older year of construction, a low degree of modernisation, a noticeable maintenance backlog and a high building share of the acquisition costs. Your tax adviser assesses whether the report pays off in tax terms; I will tell you at the preliminary check whether a shorter useful life is likely to be justifiable.
Is a site inspection necessary?
Current case law does not expressly require one. Because the report must take the individual circumstances of the building into account, an inspection is always part of my reports.
What qualification does the expert need?
As things stand (October 2026), the law does not prescribe any particular formal qualification. What matters is a comprehensible, expertly reasoned and property-specific report. I have worked in property valuation since 2005; you can find my qualifications under About.
Can the shorter useful life also be applied to past years?
That is a tax question that depends on your individual assessment. Please clarify it with your tax adviser.
How much does a remaining useful life report cost?
The work involved depends on the property type, size, documents available and travel. After the preliminary check, you receive an individual quotation.
Would you like the remaining useful life of your building checked?
Send the location, property type, year of construction and known modernisation. After a first assessment, you receive an individual quotation.