Depreciation of buildings and structures

Depreciation of buildings and structures

Our Law Firm offers the services allowing to depreciate the real estates from their market value, both for newly constructed buildings / structures, as well as real estates used for current activity for a long period of time.
It is possible through mechanisms of depreciation of fixed assets used by our Law Firm, in accordance with applicable law.

The first mechanism refers to the depreciation of newly built real estates – in the event of construction carried out on a leased property.
The optimization scheme is based on the following:
1) The tenant builds a building / structure on leased ground.
2) After the construction of the building / structure, the contract of lease is terminated with the simultaneous conclusion of the contract of sale of land and building / structure built on that land.

This situation, in principle, does not have negative tax implications and allows to set the initial value of the real estate built at its market value. Thus, the depreciation of real estate will take place from the value determined in the contract of sale.

The second mechanism, that allows to determine the market value, from which the depreciation of real estate will be made, is to contribute real estate used in business activity, to a foreign company. Then, the foreign company involves real estate to the fixed assets, setting the initial value as a market value. The real estate is afterwards transferred to client’s Polish company, which will determine its initial value also at the market value. That will allow for re-depreciate of the property.

CGO Legal Law Firm provides services related to the tax depreciation of buildings and structures. We support clients in the preparation of the optimization plan, as well as its implementation.

Should you need any further information, please contact us via e-mail or by telephone.