Turnkey house - early acceptance possible?

Hello everyone,

let's assume someone is currently building a turnkey house, traditionally with a general contractor (GC), who in turn commissions individual subcontractors for the various trades.
In the contract signed in January 2020, it was agreed that the house construction sum would be paid in individual installments depending on the completion of the trades. So, for example, if the roof structure has been erected, installment 5 would be due, which might amount to 10% of the total sum. The house is to be accepted after completion.
Only painting and tiling work have been excluded as self-performed work from the overall contract. These are awarded by the builder to companies known to him.
Due to Christmas, the companies and the GC will only work until December 22, 2020.
As everyone knows, the VAT reduction (16%) applies only until December 31, 2020. The reduced 3% makes a significant amount in house construction.
The builder now faces the problem that the screed was laid on October 29, 2020, but the gas connection will only follow on November 23, so the underfloor heating can only be heated up starting November 24. Based on the heating program (a total of 17 days), painters and tilers could only start their work around December 12, 2020.

From November 12, 2020, the following work remains to be done:
- Painting work (self-performed)
- Tiling work (self-performed)
- Installation of sanitary fixtures (WC on the ground floor + bathroom upstairs) (GC)
- Installation of doors (GC)
- Installation of stairs (GC).
It is definitely not possible to complete all the work by December 22, 2020.
It seems possible that the WC on the ground floor can be tiled and that the sanitary fixtures and door can at least be installed there. This would make the house at least "ready for occupancy." In addition, the staircase will be installed.

Question:
Are there any helpful tips on how to still carry out the final acceptance on December 22, 2020, if some smaller services (all sanitary fixtures, all doors) are not yet completed?
Could, for example, the installation of the doors and remaining sanitary fixtures be agreed upon as remaining services in January 2021, with a first major final acceptance already taking place on December 22, 2020, in order to still receive the 16% VAT for all trades accepted up to that point?
I am grateful for all answers!

Hi, for that your general contractor would have to cooperate. That also means he would have to issue the invoice to you in 2020. It becomes problematic if you accept something because of the 3% rule and in the end there are still defects.

Stress & pressure is never good advice on a construction site

It is a matter of the relationship with the contractors, trust, and risk assessment. A lot can go wrong there. We did it, and it went well. Nevertheless, I cannot advise you to do that.

Whose calculation would only work by including gifted coincidences would have miscalculated, I would say. Moreover, I see in an accounting optimized for such purposes an impermissible "abuse of structuring." This concerns not only the builder but also the tax authorities regarding substantial amounts. I see, as soon as the special situation has settled, a motivation for special audits arising. Applicable statutes under the StGB may leave a first-time offender relatively unbothered, but those under the AO regularly come with catch-up surcharges ;-)

thank you for every single answer.

Anyone whose calculation only works by including gifted coincidences would have miscalculated, I would say. Besides, I see in an accounting optimized for such purposes an impermissible "abuse of design." This concerns not only the builder but also the tax authorities with substantial amounts. I see once the special situation has subsided, a motivation for special audits arising. Applicable standards according to the StGB may leave a first offender relatively unaffected, but those according to the AO are regularly associated with catch-up surcharges ;-)

In what way? Is it not legitimate to accept certain trades at point X if they are completed and in January those that are only completed then? It is not as if I am demanding an invoice for 31.12.2020 even though all services were only performed in January but are already on the 2020 invoice.

I am somewhat uncertain, however, whether I can bring forward the acceptance of about 90% of the trades, even though I receive a turnkey house according to the contract. On the other hand, any builder could, I hope at least, make a contract amendment with the general contractor during the ongoing contract so that, for example, sanitary objects are now provided as owner’s work, which would be taken care of later.

Isn’t it legitimate to accept certain trades at a point in time X when they are completed and in January those that are only completed then?

At least equally legitimate – but probably with the stronger leverage – is the opinion of the tax legislator to view the entire work as a unit.

It’s not like I’m demanding an invoice dated 12/31/2020, even though all services were only rendered in January, which are already included on the 2020 invoice.

Sort of, but you want to break down the overall work mathematically, even though it is only completed as a whole at a later time. I do not want to exclude the possibility that a tax law expert could be found who argues this as legal – but I would point out that your responsible state finance minister might share my impression that this is somewhat questionable.