Services As of 15 June 2026

Remaining Useful Life Appraisal 2026: What Applies After the BMF Circular

The BMF circular of 1 December 2025 has eased the requirements for proving a shorter actual useful life and is again aligned with the case law of the Federal Fiscal Court. This restores the most important tax lever for landlords: anyone who substantiates the remaining useful life of a building raises the depreciation for wear and tear under § 7 para. 4 sentence 2 EStG and lowers the annual tax burden. This article explains the legal position in 2026 and the features of a reliable appraisal. Written by a property valuation expert based in Grünwald near Munich.

Why the remaining useful life is so valuable for tax

Let buildings are depreciated on a flat-rate basis under § 7 para. 4 sentence 1 EStG, regularly at two per cent per year, which corresponds to a standardised useful life of 50 years. § 7 para. 4 sentence 2 EStG, however, expressly allows the taxpayer to prove a shorter actual useful life. If the remaining useful life is substantiated at 30 years, the depreciation rate rises to around 3.33 per cent and the annual depreciation amount increases accordingly.

The effect acts directly on cash flow. Higher depreciation means lower taxable income from letting and a smaller tax payment in the current year. Depreciation itself is not a cash outflow but a tax expense item. The tax benefit brings liquidity forward and improves the return on the property. Where the building share of the purchase price is high, the lever is particularly strong.

The legal position in 2026 after the BMF circular

Central statement: the governing authorities are the statutory wording of § 7 para. 4 sentence 2 EStG and the case law of the Federal Fiscal Court. The BMF circular of 1 December 2025 has eased the previously very restrictive administrative requirements and restores alignment with the supreme court line. The earlier BMF circular of 22 February 2023, which sought to tie the evidence to narrow formal conditions, is thereby superseded.

The supreme court basis is the Federal Fiscal Court judgment of 28 July 2021, IX R 25/19. According to it the taxpayer may use any method of presentation that appears suitable in the individual case to furnish the evidence. A separate building substance survey is not required. The Federal Fiscal Court judgment of 23 January 2024, IX R 14/23, confirms and refines this line. With the circular of 1 December 2025 the administration now follows this case law once again.

Boundary to structural inspections. A remaining useful life appraisal is based on the visual inspection of the accessible building components and the review of the documentation. A substantive structural inspection involving opening of building components or material analyses is the task of separate experts for structural defects and is not part of the remaining useful life appraisal.

Methodological pathways to a shorter remaining useful life

Since the Federal Fiscal Court does not prescribe a specific method, several recognised pathways are open. The expert selects the pathway suitable in the individual case and justifies it.

1. Model approach under ImmoWertV

The ImmoWertV provides a recognised model. The starting point is the economic total useful life less the building age. This calculated remaining useful life is modified by the structural condition and by modernisations carried out or still outstanding. The model is transparent and readily verifiable for the tax authority.

2. Individual-case evidence on the specific property

Instead of a pure model value, the remaining useful life is derived from the concrete circumstances of the property. What matters is the condition of roof, windows, heating and electrics as well as the degree of modernisation. This view is more effortful but closer to the actual wear.

3. Expert appraisal as overall evidence

The expert appraisal combines the model approach and the individual-case view into a coherent justification. It documents the visual inspection, classifies the findings methodologically and derives the assumed remaining useful life in a verifiable way. This is the most robust pathway towards the tax authority.

What the appraisal must contain

A reliable remaining useful life appraisal contains the following building blocks. This checklist helps clients assess quality before and after the mandate:

Clear identification of the valuation object with complete object data including address and parcel number
Statement of the reference date and the purpose of the appraisal
Documentation of the on-site inspection with photographs of the accessible building components
Schedule of reviewed documentation and justification for any assumptions in the absence of data
Description of the building condition for roof, facade, windows, heating, electrics and sanitary installations
Presentation of modernisations carried out and outstanding with their effect on the useful life
Justified selection and application of the method under ImmoWertV
Verifiable derivation of the assumed remaining useful life in years
Assessment of the economic usability at the location
Signature of the expert with statement of role and underlying qualification

Anonymised case study

Multi-family house in Munich, built in the 1960s

Situation. A tax adviser instructs, for a letting owner, the justification of a shorter remaining useful life for a multi-family house with six residential units in Munich built in the 1960s. The property is partially modernised but has an old heating system, single-glazed windows in the stairwell and a recognisable maintenance backlog. Depreciation has so far been taken at the flat rate of two per cent.

Approach. Review of documentation, on-site visit with visual inspection of the accessible building components, analysis of the modernisation status, model approach under ImmoWertV with individual-case justification. The economic total useful life less age and the documented condition lead to a substantiated remaining useful life of 30 years instead of the standardised 50 years.

Outcome. The depreciation rate rises arithmetically from two per cent to around 3.33 per cent. The appraisal justifies the shorter useful life methodologically and relies on the pathways reopened by the BMF circular of 1 December 2025. Fee in the mid four figure range, deductible as income-related expense where the property is let. Processing time four weeks from mandate.

Warning signs of questionable RUL appraisals

There are providers in the market whose methodology does not stand up to critical review. An appraisal rejected by the tax authority costs money and time without securing the tax benefit. Clients should take the following signals seriously:

Flat prices without review of the key data of the property
Missing on-site inspection, that is a pure desktop appraisal without a site visit
Unsubstantiated assumptions about the useful life without reference to the concrete building condition
Pure table values without an individual-case assessment of the property
Marketing as a certified company. Certifications in property valuation are personal, no company can be certified
Guaranteed results or fixed year figures before the inspection
Missing written fee agreement before mandate acceptance

Frequently asked questions

What is the remaining useful life of a property?

The remaining useful life is the number of years a building can be expected to be economically used under proper management. It is derived from the total useful life less the building age and modified by structural and economic factors.

For tax purposes it is the anchor for proving a shorter actual useful life under § 7 para. 4 sentence 2 EStG.

What does the BMF circular of 1 December 2025 say about remaining useful life?

The BMF circular of 1 December 2025 eases the requirements for proving a shorter actual useful life and is again aligned with the case law of the Federal Fiscal Court. The earlier BMF circular of 22 February 2023 with its restrictive requirements is thereby superseded.

The governing authorities are now the statutory wording of § 7 para. 4 sentence 2 EStG and the judgments IX R 25/19 and IX R 14/23. See also our commentary on the BMF circular.

What does the tax authority check in a remaining useful life appraisal?

The tax authority checks whether the assumed remaining useful life is justified in a verifiable way. It expects a visual inspection of the accessible building components, documentation of the property condition, the application of a recognised method under ImmoWertV and a coherent derivation of the years.

A mere table value without reference to the specific property is regularly insufficient.

Who may prepare a remaining useful life appraisal?

A remaining useful life appraisal is prepared by a property valuation expert. According to the case law of the Federal Fiscal Court no separate building substance survey is required.

What matters is the technical qualification and a verifiable methodology, not a specific form.

What does a remaining useful life appraisal cost?

The fee depends on the asset type and the effort to establish the determinants. For a single-family house it is regularly in the low four figure range, for a multi-family or mixed-use property in the mid to upper four figure range.

A reliable fee estimate is provided only after reviewing the key data. Where the property is let, the appraisal cost is regularly deductible as income-related expense.

How long does preparation take?

From mandate via on-site inspection to delivery the regular timeframe is between three and six weeks. Incomplete documentation extends the processing time. Expedited work is possible against surcharge.

What is the risk if the tax authority rejects the appraisal?

If the tax authority rejects the shorter useful life, the flat-rate depreciation initially remains. An objection under § 347 AO is possible within one month against the assessment, followed by the route to the tax court.

The most important safeguard is a methodologically sound appraisal that justifies the assumed remaining useful life on the specific property.

Legal basis and sources

Fee estimate for RUL appraisals within two business days

Tax advisers, landlords and family offices receive a reliable fee estimate for the remaining useful life appraisal after a brief review of the key data of the property. Discreet, in writing, no sales pressure.

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