Acquisition costs / production costs
Acquisition costs and production costs are costs you incur when you purchase a property. They are relevant for tax purposes if you use the building as a capital investment. They serve as the basis for calculating the depreciation (Absetzung für Abnutzung), i.e., how much you can claim on your tax return.
Acquisition costs include all costs that are necessary for the purchase:
the purchase price
notary fees
land registry fees
brokerage fees
financing costs
costs for works required to ensure proper use of the building.
The costs for the land are deducted in a depreciation calculation.
Production costs include all costs incurred for the construction, extension or significant improvement of a building, e.g.
construction and material costs
architect fees
craftsmen wages
costs for extensive modernization and refurbishment work carried out within three years of the acquisition of the building, if the net cost exceeds 15% of the acquisition costs for the building (production costs close to acquisition).
Maintenance costs and any personal labor may not be included.
More on the subject of depreciation can also be found in our article:
