Depreciation of the building when renting

As the owner or buyer of a property, you can only claim the associated financial expense for tax purposes if if you rent out your property or, in the case of a property you use yourself, at least in the form of a granny flat partial rent. If you live in your property alone, you have tax exceptions Deductibility from craftsman services no more advantages. The home owner's allowance was abolished in 2006.

Renting must be part of your financial planning

• So if you consider tax savings as part of your financing strategy, you have to consider your property from the perspective of the Consider renting or furnishing at least one granny flat in a residential building you use yourself, or rooms for commercial purposes rent.
• You can do those associated with constructing and purchasing a building
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  costs depreciate linearly or degressively. The differences are sometimes considerable.

There are two ways of depreciation

• The linear depreciation you can use it as a builder of a new building or as a buyer of a used property. For properties completed after December 31, 1924, it amounts to 2% of the cost of the building over a depreciation period of 50 years.
• You can only make use of the declining balance depreciation as the building owner. As a buyer of a property, you are only eligible if you acquire the property in the year of completion. If you buy a condominium in the year after its completion, you only have to pay straight-line depreciation. Over a depreciation period of 50 years, it amounts to 4% in the first 10 years, 2.5% in the following 8 years and 1.25% of the production costs of the building in the remaining 32 years.


Land Depreciation - Know This Before Buying

Because of the abolition of the home owner's allowance, a property pays for itself under tax ...

Your personal situation determines the Afa

• Your decision as to whether you should use straight-line or declining balance depreciation depends on what makes more sense for you from a tax point of view makes: a fast and high depreciation with a high initial tax effect (degressive) or the time extension with lower depreciation amounts over several years (linear).
• If you are building at a young age and depreciation is part of your financing strategy, you should depreciate using the degressive method. You then effectively have more money available and, as you get older, you may no longer be dependent on this tax effect as a result of renting out.

Convert an existing building into a new building

• If you are converting or expanding an existing property, make sure that it is treated as a new building for tax purposes. A new building is created when you rebuild a part of the building in such a way that it makes the entire building appear structurally new. So plan accordingly.
• In order to properly utilize the acquisition costs for tax purposes, make sure that you present the market value of the building and the property separately in the notarized purchase agreement. You can only pay the purchase price for the building, not the one propertyclaim.