> 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/10078600-instandhaltung-erhaltungsaufwand-handwerker-reparaturen-aktivierungspflichtig.md). # Maintenance, upkeep, tradespeople, repairs (subject to capitalisation) Help on the Immodio entry item Maintenance, maintenance expenditure, tradesmen, repairs (subject to capitalisation, production costs close to acquisition).
Use this category for **building work on a residential building that may not be deducted immediately for tax as maintenance expenditure but has to be attributed to the acquisition or production costs of the building**. These include in particular: * production costs close to acquisition, * certain costs of establishing operational readiness after the purchase, * extensions to the building and * measures that lead to a substantial improvement of the building. In a circular of **26 January 2026** the Federal Ministry of Finance comprehensively restated the distinction. Immediately deductible maintenance expenditure and costs subject to capitalisation have to be clearly separated from one another. #### What does "subject to capitalisation" mean? Subject to capitalisation means: {% hint style="info" %} The expense is **not deducted in full as income-related expenditure in the year of payment**. Instead it increases the acquisition or production costs of the building. The amount is then in principle taken into account together with the building through the building depreciation concerned. {% endhint %} #### Case 1: production costs close to acquisition The most frequent case of application for private landlords is production costs close to acquisition under Section 6 (1) no. 1a EStG. The conditions are in principle: * the building was acquired for consideration, * refurbishment or modernisation measures are carried out within three years of the acquisition and * the relevant expenditure **excluding VAT exceeds 15% of the acquisition costs of the building**. #### Example You buy a let property. The split of the purchase price for the **land: €150,000** The split of the purchase price for the **residential building: €300,000** The 15% limit: **€300,000 × 15% = €45,000** Within the first three years costs arise for * windows: **€18,000 net** * the bathroom: **€12,000 net** * the electrics: **€10,000 net** * painting work: **€8,000 net** Costs of **€48,000 net** in total, therefore. The limit of €45,000 is thereby exceeded. The qualifying refurbishment and modernisation expenditure concerned is then in principle **production costs close to acquisition** and may not be deducted immediately as income-related expenditure. It belongs in the category subject to capitalisation. #### The three-year period is calculated to the exact day Under the current Federal Ministry of Finance circular, the period begins with the **transfer of economic ownership**, that is typically with the transfer of possession, risk, benefits and burdens. It does not simply begin: * with the notary appointment, * with the date of the tradesman's invoice or * with the time of payment. By the end of the three years the measures also do not have to be fully invoiced or paid. What is decisive in principle is the construction work carried out within the period. #### Exclude maintenance work that is usual annually Maintenance work that usually arises annually is not part of the 15% limit. This includes, among other things: * running heating maintenance, * lift maintenance, * pipe cleaning, * descaling, * meter reading costs. Such normal maintenance does **not** become subject to capitalisation merely because it takes place within the first three years. #### Extensions also belong in this category Extensions are expressly **not** included in the 15% limit, but they still have to be capitalised under the general rules on production costs. Typical examples are: * a new balcony, * a new terrace, * an additional dormer, * additional usable area created for the first time, * certain new building facilities creating additional possible uses. #### A substantial improvement Even years after buying the property, building work can be production costs. That applies in particular where the building's use value is **considerably increased** compared with its original condition. With residential buildings these include above all: * heating, * sanitary installations, * the electrics, * windows. Where the building's standard is considerably raised in at least **three** of the **four** central areas, there can be a substantial improvement. The costs can then still be subject to capitalisation after the first three years have passed. #### Establishing operational readiness after the acquisition Another important group of cases is costs necessary immediately after the purchase in order to put an acquired building into the condition in which you can use it as intended at all. Under the view of the tax authorities, acquisition costs also include expenditure necessary to put an acquired building into an **operational condition**. This includes in particular restoring non-functioning parts of the building essential for its use after the acquisition, such as a completely defective heating system or existing uninhabitability as a result of considerable damage. Such costs are likewise **not** immediate maintenance expenditure. #### Exceeding 15% can have retrospective consequences Where the 15% limit is only exceeded in the second or third year, the Federal Ministry of Finance treats that as a retrospective event. Treatments for tax already made in earlier years may then have to be corrected. Example: Year 1: **€20,000** Year 2: **€15,000** Year 3: **€15,000** The limit: **€45,000** Only with the measure in the third year does the total amount rise to **€50,000**. {% hint style="warning" %} The measures from years 1 and 2 may then also have to be treated retrospectively as production costs close to acquisition. {% endhint %} #### Assignment The costs specifically constitute the acquisition/production costs of **a particular building** and therefore its later basis of assessment for depreciation. Select as the **assignment → "Property".** #### Which documents should you keep? Particularly important are: * the purchase agreement, * the date of the transfer of economic ownership, * the split of the purchase price between the land and the building, * all tradesmen's invoices within the first three years, * the periods of the tradesmen's services, * proof of payment, * a description of the measures, * building plans for extensions, * documentation of the building's condition at the time of acquisition, * photos before and after the refurbishment, where applicable, * insurance and other reimbursements. ***