Who rents real estate, must distinguish between acquisition, production and immediately deductible costs. Tax law assigns the respective expenses to one of these categories according to certain criteria. Maintenance and modernization costs in particular often lead to disputes with the tax office. The reason for this is that the investor wants to deduct the expenses immediately as operating expenses or advertising costs, but the tax office orders a distribution over the depreciation period (50 years or 30 years). The term so-called standard elevation plays a decisive role here. When such a one exists, how it can be avoided and what tax consequences occur, we show in this article!

Principle 1: Maintenance and modernization costs as deductible expenses

According to § 9 (1) sentence 1 EStG, expenses for the maintenance and modernization of a property are deductible immediately as advertising costs. The same applies according to § 4 (4) EStG for operating expenses, if the property represents, for example, operating assets of a real estate GmbH.

This principle distinguishes expenses for the modernization of acquisition or production costs. This is because the taxpayer has to write off the period of use of the property according to § 7 (4) EStG; a complete approach in the year of payment is eliminated. The term of use is fictitious by the law at 33 years or 50 years. In individual cases, a shorter period of use can be used if a period of use report is available (§ 7 (4) sentence 2 EStG).

The standard elevation occupies here almost a “central position”. The same applies to purchase-related production costs. The legislator does not immediately allow maintenance or modernization costs to be deducted, but orders a distribution on the period of use of the property. However, this is only done if certain conditions are met.

Acquisition-related manufacturing costs vs. standard raise: the differences

According to § 6 (1) no. 1a EStG, expenses for the repair or modernization of the property are part of the acquisition costs if they are incurred within 3 years after the acquisition. If this requirement is met, the actually immediately deductible costs must therefore be distributed over the period of use of the property. They increase the tax base for depreciation (AfA) and reduce the surplus from the rental.

Crucially, however, the amounts spent within 3 years reach or exceed 15% of the acquisition costs. If the expenses remain below this limit, they are still deductible as operating expenses or advertising costs. They therefore do not reduce the surplus from the rental over the entire period of use, but in the year of payment.

Different principles apply in the standard lift. In particular, it does not depend on the amount of the costs or the time of their investment. The only decisive factor is the impact of the renovation or repair measures on the housing value of the property. If certain criteria are met here, acquisition costs are present.

3. The standard elevation in detail

According to § 255 (1) sentence 1 HGB, acquisition costs are all expenses incurred in order to acquire a property and put it in an operational condition. A property is “operational” if it is usable according to the wishes of the acquirer. This is the case, for example, if a property purchased for residential purposes is actually habitable.

The Bundesfinanzhof (BFH) had to deal with the question of this “operational readiness” in several decisions (including BFH judgments of 9.5.1995 – BStBl 1996 II p. 628, 630, 632, 637 –; 10.5.1995 – BStBl 1996 II p. 639 – and 16.7.1996 – BStBl II p. 649). Here he explained how in individual cases between