Our new tax advisor here in town says that the land must be taken into account in the 350,000; we "alone" use it and it cannot be counted towards the financing/tax of the rented part. Since the land has enormous value, almost nothing would be left for the 3 apartments.
Your tax advisor is mistaken.
To clarify this, I have explained the approach using the income approach, because it is clearly described in the law (ImmoWertV §17(2)) that:
[...]from the net income capitalized according to § 20 (§ 18 paragraph 1) and the land value determined according to § 16, which with the exception of the value of independently usable partial areas is to be discounted to the valuation date according to § 20 (simplified income approach).
An independently usable partial area is the part of a property that is not required for the reasonable use of the buildings and can be used or exploited independently.
Therefore, only those
outdoor areas that serve solely the use of the lower apartment are to be added to the lower apartment.
Separately to be considered is in any case the built-up building area as well as common areas such as access roads, front gardens, and possibly also areas that are (exclusively) intended for the tenants in the garden.
The "communal areas" must therefore be proportionally valued; the garden area that explicitly belongs to the lower apartment obviously only factors into the valuation of the lower apartment - but definitely not the entire size of the property.
So - and when this is clearly regulated in the income approach, then logically it cannot be different in the cost approach. The problem is that the cost approach is not designed to value individual apartments of a building, but this procedure focuses only on the entire property. Nevertheless, the WertR contains the following addition regarding the
cost approach:
6.1 Special Income Conditions
If the valuation object shows income significantly deviating from the usual, this circumstance must be considered as value-decreasing or value-increasing. The value decrease or increase is to be determined according to the principles of the income approach.
In plain language: from the WertR it clearly emerges here that the cost approach reaches its limits when valuing (individual) rental apartments and therefore the income approach
should be applied if necessary.
If the tax advisor/tax officer therefore refuses approval via the cost approach, then it is possible that he understands the valuation via the income approach and the penny drops. The main thing is that you reach your goal.
Best regards
Dirk Grafe