> For the complete documentation index, see [llms.txt](https://help.immodio.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.immodio.app/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10020500-bauten-und-gebaeude-auf-eigenen-grundstuecken-oder-grundstuecksgleichen-rechte.md). # Structures and buildings on own land or on rights equivalent to land Help on the Immodio entry item Structures and buildings on the owner's own land or on rights equivalent to land.
Use this category for **acquisition or production costs of a building on your own land or on a right equivalent to land that are subject to capitalisation**, where no more specific Immodio category fits better. ### What does "a right equivalent to land" mean? In law, a right equivalent to land is treated in essential respects in a similar way to land. A typical example for landlords is the **heritable building right** in particular. This category can therefore be relevant not only for buildings on land held in classic ownership but also for buildings erected on a corresponding right equivalent to land. ### What can be entered here? Costs that belong directly to producing or acquiring the building in particular can be recorded here, as far as there is no more specific Immodio category. Typical production costs of a new build can be, for example: * shell construction work, * the roof, * windows and doors, * the electrical installation, * the sanitary installation, * the heating installation, * screed and floor construction, * interior fitting out, * plastering and painting work as part of the production, * architects' and engineers' services, * technical construction supervision, * building supervision, * services in connection with the building permit, * other costs caused directly by erecting the building. Under Section 255 (2) of the German Commercial Code, production costs are expenditure on producing an asset and on extending it or substantially improving it beyond its original condition. {% hint style="info" %} The tax authorities generally classify technical construction support services such as obtaining a building permit, building supervision or building acceptance as part of production. {% endhint %} ### Example: building a new apartment building You already own an undeveloped plot and have an apartment building erected on it. During the construction, costs arise for example for: * €450,000 for the building contractor, * €50,000 for the architect and specialist planners, * €20,000 of other production costs directly attributable to the building. In this simplified example the production costs of the building total: **€520,000** This €520,000 is not immediately deductible as income-related expenditure. Rather, it forms in principle the basis of assessment for tax for the later building depreciation. The basis of assessment for the depreciation is in principle the acquisition or production costs of the asset. ### Always separate land and building The separation between the following is particularly important: **land** and **building**. The land is **not** depreciated for tax. Only the value attributable to the building can be taken into account through the building depreciation. Costs attributable exclusively to acquiring the land or to its value, for example, may therefore not simply be recorded in this building category. {% hint style="warning" %} To split off the share for the land, use the category "[**Purchase of land**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10081800-kauf-von-grundstuecken.md)" or "[**Purchase of undeveloped land**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10082000-kauf-von-unbebauten-grundstuecken.md)". {% endhint %} Where you buy land that is already developed, for example, the purchase price economically consists of at least two components: * the land, * the building. The whole purchase price may therefore not be recorded as the building value but has to be split between the two categories "[**Purchase of land**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10081800-kauf-von-grundstuecken.md)" and "**Structures and buildings on the owner's own land or on rights equivalent to land**". Incidental purchase costs also have to be taken into account in principle according to their economic attribution and therefore split within a single purchase price for the land and the building. ### When does the depreciation begin? The production costs of a let building are not deducted as ordinary income-related expenditure during the construction phase. Once the building is completed, the deduction for tax is generally made through **depreciation for wear and tear**. For a self-built building ELSTER therefore requires, among other things, the date of completion. For straight-line building depreciation the following percentages currently apply in principle: * buildings completed before 1925: **2.5% per year** * buildings completed from 1925 to the end of 2022: **2% per year** * buildings completed after 31/12/2022: **3% per year**. For a let residential building newly erected today, straight-line depreciation of **3% per year** therefore comes into consideration in principle. ### Declining balance depreciation for new residential buildings For certain new residential buildings there is also the option of **declining balance building depreciation**. For eligible residential buildings, depreciation of **5% of the residual value** can currently be chosen under the statutory conditions where production began after 30 September 2023 and before 1 October 2029. For production, the notification of the start of construction is generally decisive. Whether this variant is more favourable than straight-line depreciation depends on the individual case. ### Special depreciation for new rental housing For landlords who create new housing, Section 7b EStG can also be particularly interesting. Under the statutory conditions, **special depreciation of up to 5% per year** can be claimed for new rental apartments in addition to the ordinary building depreciation in the year of production and in the following three years. For current construction projects with a building application or building notification after 31/12/2022 and before 1/10/2029, the following conditions apply among others: * a new apartment is created, * the building meets the requirements of an **efficiency house 40 with a sustainability class**, * this is evidenced by the **Sustainable Building quality seal**, * the acquisition or production costs do not exceed **€5,200 per m² of living space**, * the apartment is let for consideration for residential purposes in the year of completion and in the following nine years. The basis of assessment for the special depreciation is limited to **€4,000 per m² of living space**. With new build projects it should therefore be checked early on whether the conditions of Section 7b EStG can be met. ### Extensions to an existing building Production costs can arise not only with a complete new build. **Extending an existing building** can also cause production costs. The tax authorities name, for example: * enlarging the usable area, * an increase in substance that widens the possible uses of the building. Even a minor extension can be a production cost. Typical cases can be, for example: * adding an additional apartment, * converting space to add usable area, * adding a storey to the building, * extension by additional parts of the building. Such measures may not automatically be treated for tax like an ordinary repair. ### Do not enter repairs and maintenance expenditure here Not every building measure on a building is part of the production costs. Merely renewing parts that are already present is generally **maintenance expenditure**. Production costs arise in particular with an extension or a substantial improvement beyond the original condition. The following ordinary running items, for example, therefore do not belong here: * repairs, * maintenance, * repair work, * ordinary upkeep, * operating costs. For these costs use either the category "[**Maintenance, maintenance expenditure, tradesmen, repairs (subject to capitalisation, production costs close to acquisition)**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10078600-instandhaltung-erhaltungsaufwand-handwerker-reparaturen-aktivierungspflichtig.md)" or "[**Maintenance, maintenance expenditure, tradesmen, repairs (immediately deductible as depreciation)**](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10078700-instandhaltung-erhaltungsaufwand-handwerker-reparaturen-sofort-als-abschreibun.md)". ### A special feature after buying an existing building With an existing building that has been bought, the **15% limit for production costs close to acquisition** also has to be taken into account. Where refurbishment and modernisation measures are carried out within three years of the acquisition and their expenditure excluding VAT exceeds **15% of the acquisition costs of the building**, that expenditure is generally treated as production costs close to acquisition. The costs are then in principle not immediately deductible as income-related expenditure but increase the basis of assessment for the building depreciation. Maintenance work that normally arises annually, among other things, is excluded from this. ### Assignment in Immodio With this category select either the assignment **"Owner"** or **"Property".** ### Which documents should you keep? When producing a building you should document particularly carefully: * all construction and tradesmen's invoices, * the invoice date, * the description of the service, * the company carrying out the work, * architects' and engineers' invoices, * the building permit, * the building application or building notification, * the notification of the start of construction, * the date of completion, * proof of payment, * the split between the building and the land, * the split of different parts of the building, where applicable, * evidence of subsidies and grants, * evidence for Section 7b EStG, where applicable.