By judgment of 20 March 2024 (case no. 3 K 3137/19, GuG 2024, 309–319), the Berlin-Brandenburg Fiscal Court (FG Berlin-Brandenburg) confirmed the so-called Jacoby method as a judicially recognised method for purchase price allocation. The court found that this valuation method complies with the requirements of §§ 194 et seq. BauGB and the ImmoWertV, produces realistic results and can therefore be used as an appropriate basis for determining the depreciation (AfA) assessment base.

Background: The Jacoby method

The Jacoby method is an independent valuation approach developed by Prof. Dr. Jacoby, positioned as an alternative to the classic ImmoWertV approaches (sales comparison approach, income approach and cost approach). It is intended, in particular, to produce more market-consistent results in purchase price allocation than the simplified cost approach used in the BMF working aid (BMF-Arbeitshilfe).

The method was controversial in tax practice: tax offices sometimes rejected appraisal reports based on it because it does not belong to the standard approaches explicitly regulated under the ImmoWertV.

The case

In the case at issue, a taxpayer had submitted an appraisal report based on the Jacoby method for a rented property in Berlin, which showed a higher building share than the BMF working aid. The tax office rejected the appraisal report. The FG Berlin-Brandenburg comprehensively examined the methodology.

The decision

The FG Berlin-Brandenburg essentially ruled in favour of the taxpayer:

1. Methodological openness applies here as well. The court refers to the case law of the Federal Fiscal Court (BFH) (IX R 12/21, IX R 26/19): there is no binding requirement to use particular valuation approaches for purchase price allocation. What matters is the appropriateness and the realistic representation of the value relationships in the individual case.
2. The Jacoby method is neither unlawful nor methodologically flawed. The court found: the method "does not, in principle, contradict the requirements of §§ 194 et seq. BauGB and the ImmoWertV" (paras. I–III of the judgment). It is guided by the principles of market value determination and can be applied alongside the classic approaches.
3. Individual valuation results. The method produces realistic, property-specific results and therefore corresponds to the principle of individual valuation that the BFH expressly emphasised in IX R 12/21. A purely schematic approach (such as the BMF working aid) cannot be considered equivalent.
4. General approval for practice. Expert appraisal reports based on the Jacoby method can be submitted as evidence of the actual value relationships for purchase price allocation. The tax office is not entitled to reject them solely on the basis of the chosen method.

Significance for practice

• Expanded range of methods. The decision confirms the methodological freedom opened up by BFH IX R 12/21 for a further valuation approach. Taxpayers and valuers may use the Jacoby method provided that the appraisal report individually analyses the specific property and presents the methodology transparently.
• Distinction from the BMF working aid approach. The FG implicitly places the Jacoby method in sharp contrast to the BMF working aid: whereas the latter operates on a flat-rate basis without regard to the individual case, the Jacoby method takes into account the specific characteristics of the respective property.
• A trend towards greater methodological openness. The judgment aligns with the BFH judgments IX R 12/21 (2022) and IX R 26/19 (2020): the case law as a whole is moving away from a hierarchy of methods towards a case-by-case quality assessment of the respective valuation approach.