Is development in the construction industry eligible?

Yes, if an open technical question is settled in a component test instead of planned to recognised rules. Planning to Eurocode is routine; a component test with an open outcome is experimental development under Section 2 FZulG.

Construction R&D Tax Credit 2026

In the construction industry the open technical question decides, not the size of the building.

The certification office does not assess how complex a building was, but whether a technical question was open beforehand and answered systematically. A construction company rarely loses an application on the technology; usually it is lost because construction work to established codes of practice and development sit in the same project.

Rates, costs and limits

The essentials on the research allowance in the construction industry

Funding rate: 25% of the assessment basis, 35% for SMEs. For projects started after 31 December 2025, a 20% flat rate increases the assessment basis (Section 3 (3b) FZulG); the EUR 12 million cap still applies (Section 3 (5) FZulG).
Eligible: New construction methods, building materials, components and construction processes with an open technical question decided in advance: structural design beyond established codes of practice, novel connection techniques, component testing. What counts is not the trade but whether novelty, technical risk and systematic approach can be demonstrated.
What counts: The employer gross salary of structural engineers, civil engineers and test engineers for the hours spent on the project. Since 2024 also the depreciation of movable assets used exclusively for the project, such as a test press. Building material and prototype material itself is not eligible.
Ceiling: Assessment base of EUR 12 million per financial year, maximum research allowance EUR 4.2 million.
Contract research: 70% of the cost of commissioned development work is eligible (Section 3 (4) FZulG): materials testing institutes, university institutes, external test laboratories.
Retroactive: Applications for closed financial years from 2022 are possible as long as the assessment period of the respective year is still open; for 2020 and 2021 it has expired (§ 12 FZulG in conjunction with § 169 AO). Projects started before 1 January 2026 do not receive the overhead allowance.

Which activities in the construction industry are eligible?

The trade does not decide eligibility. The certification office checks every project against three criteria: novelty, technical risk, systematic approach. If one fails, the application fails. Below are the activities we encounter most often at construction companies and suppliers, with the verdict we expect.

Boundary case: eligibility depends on the specific project.

Structural design & engineering

Novel structural concept with an open question on load-bearing or deformation behaviour (e.g. carbon-reinforced concrete flat slab, textile reinforcement)Eligible
Eligible. Novelty: No standardised design method covers the combination of reinforcement type, component thickness and load case; Eurocode verifications run into a gap. Technical risk: Whether deflection, crack pattern and load capacity meet the target value is not established before calculation and component testing. Systematic approach: Design model, FEA, component test, measurement series, iteration, documented by calculation reports and test protocols.
Topology-optimised or adaptive structure based on known materialsBorderline
Borderline. Eligible is the share for which no established design method exists, usually the numerical validation of the optimised geometry against measurement. Applying optimisation software per the manual is routine.
Soil-structure interaction in an unusual foundation situationBorderline
Borderline. Eligible if the interaction of ground and foundation is not fully captured by calculation and is resolved through testing or monitoring. A foundation designed to the geotechnical report and to standard is planning.
Structural verification to Eurocode for a conventional buildingNot eligible
Not eligible. The design method is standardised, the result predictable in advance. The effort or complexity of the calculation is not a criterion of the FZulG.

Materials development & testing

New concrete mix or reinforcement type with open durability or load capacity (e.g. carbon-reinforced concrete, low-carbon cement, recycled aggregate)Eligible
Eligible. Compressive strength, shrinkage behaviour and durability conflict and are measurable. That makes the technical risk quantifiable, the strongest starting position an application can have.
Test series for a case-by-case approval (ZiE) for a new construction product without a harmonised standardEligible
Eligible. The ZiE is the evidence route, not the goal of the project. Eligible is the test series that shows a previously unknown behaviour was systematically clarified, documented in the test certificates of the materials testing institute.
Optimising an existing mix for a new target value (e.g. early strength, carbon footprint)Borderline
Borderline. Eligible as soon as a measured target value is required that the known mix demonstrably fails to reach, and the cause is unclear beforehand. Simply readjusting mix ratios within the known range is mix maintenance.
Materials testing for conformity control under DIN EN 206Not eligible
Not eligible. Regular factory production and external control is quality assurance with a prescribed procedure and known outcome, not knowledge generation.

Construction methods & execution technology

3D concrete printing process with open layer bond or green-state stabilityEligible
Eligible. Whether successive layers reach the required bond strength under self-weight and time pressure is not determinable before the print series. Measurement series on layer spacing, print speed and hardening are the evidence.
Robot-assisted assembly with its own control for tolerance compensation on the componentEligible
Eligible. Anyone who designs a control system because standard grippers or paths do not compensate for dimensional tolerance on the real component must explain why available solutions fail. Measurement series on positioning accuracy over iterations demonstrate systematic approach and risk.
Automated site logistics or survey drone connected to legacy systemsBorderline
Borderline. Eligible is the share in which own evaluation methods for unclear sensor data are developed. Pure wiring and integration of finished drone software is integration.
Introducing a commercially available formwork system or assembly robot per manufacturer instructionsNot eligible
Not eligible. Even demanding onboarding remains applying a finished method. The way is documented, the result guaranteed by the manufacturer.

Prototype, component testing & pilot builds

Component test or pilot build to resolve a question open beforehand, with measurement plan and abort criteriaEligible
Eligible. The clearest case in this group. Whoever defines in advance what is measured and when the trial counts as failed has already documented systematic approach and technical risk before the certification office asks.
First application of a new component in a real building under service loadBorderline
Borderline. Eligible is the share in which behaviour not previously mastered is worked out on the real building, documented by monitoring and measurement series. Handover per the acceptance protocol is construction work.
Show home or exhibition build without systematic measurementNot eligible
Not eligible. A demonstration object without a measurement plan and evaluation is marketing, not experimental development, regardless of how novel the installed products are.

BIM & digitalisation

Own collision or optimisation algorithms for BIM models beyond the standard functionEligible
Eligible. Whether a self-developed method detects collisions or sequencing more reliably than the BIM software's standard check is open beforehand. Comparative measurements between method and outcome are the evidence.
Scan-to-BIM for existing buildings with unclear point-cloud qualityBorderline
Borderline. Eligible if it is documented that standard algorithms fail to convert the available point cloud into a usable model and own conditioning methods had to be developed. Pure surveying and modelling from catalogue components is planning.
BIM coordination and model maintenance in an ongoing project with Revit, ArchiCAD or AllplanNot eligible
Not eligible. Using commercial planning software as intended remains a planning service, regardless of the model's level of detail (LOD).

What is regularly rejected

Construction work per approved plans and established codes of practiceNot eligible
Not eligible. Building itself is the intended service of the construction trade, not its gain of knowledge. The codes of practice fix the way and the result in advance.
Site supervision, acceptance, defect remediationNot eligible
Not eligible. Necessary work with a fixed goal: the execution matches the plan. No gain of knowledge in the sense of the FZulG.
Structural verification to Eurocode without an open questionNot eligible
Not eligible. A standard verification with a normative design method, even with high calculation effort. Effort does not replace an open technical question.
Energy retrofit using established methods (insulation, window replacement)Not eligible
Not eligible. Implementation of known measures per the Buildings Energy Act and manufacturer specification. It becomes eligible only when a new system combination is meant to reach a target that catalogue products demonstrably cannot reach.

Your project is not listed or sits between two lines? That is the normal case; eligibility is decided on the specific facts, not on the heading. Describe the project to us and we will tell you where it stands.

What evidence does the BSFZ expect in the construction industry?

Construction companies practically never introduce an additional system for the research allowance; they have the evidence already. We evaluate what exists and assign each source to the criterion it supports.

What evidence does the BSFZ expect in the construction industry?
Source	What it proves	Criterion
CAD/BIM revisions · design changes	Design revisions show attempt, rejection and new approach, the strongest evidence of experimental development a design office can deliver.	Systematic approach · Technical risk
Component tests · test rig protocols	Aborted trials and measurement series date what was tried when and what it was measured against. A failed trial is no blemish; it is proof of an open outcome.	Systematic approach · Technical risk
FEA and structural reports	Calculation reports with boundary conditions, convergence studies and comparison against measurement show that the target value was not trivially achievable.	Technical risk
Test certificates from the materials testing institute · ZiE documentation	Test certificates and the documentation for the case-by-case approval systematically record which behaviour was tested and with what result.	Systematic approach
Site measurements · monitoring data	Measurements before and after the intervention document the difference between construction to plan and working out previously unknown behaviour.	Scope
Design changes · change logs	Change histories name the rejected solutions, exactly the information with which the state of the art can be demonstrated.	Novelty
Time recording · project hours	For the tax office application the hour counts. We map an existing time recording onto the projects instead of introducing a parallel system.	Cost side
Standard tests · materials test reports (DIN EN 206, DIN EN 1992)	Strength, durability and fire tests to DIN and EN document the experimental character when they reflect iterations, not just conformity control.	Systematic approach

The most common mistake in assisted applications is a development process constructed after the fact with phases that never existed at your company. Your real test protocols and design changes are the better evidence; they provide a complete, dated record of the procedure.

What comes out of it?

Two calculated cases for projects that started after 31 December 2025, once at the SME rate of 35%, once at the standard rate of 25%.

Construction company with its own development department, 60 employees · SME

Employer gross, 10 structural and civil engineers: EUR 800,000. Ten structural and civil engineers, R&D share documented via project hours, plus a testing contract placed with a materials testing institute

R&D personnel costs (employer gross)EUR 320,000

Contract research, 70 % of EUR 50,000+ EUR 35,000

Overhead flat rate 20 %+ EUR 71,000

Eligible expensesEUR 426,000

Funding rate35 %

Research allowance per yearEUR 149,100

Per year. Applied for retroactively over three open financial years: around EUR 0.4 million, without the overhead allowance, because the project started before 2026.

Precast concrete plant and engineering office, 220 employees

Employer gross, 18 developers: EUR 1,620,000. Eighteen developers working on a new connection technique for precast elements, not an SME. Standard rate 25%, contract research with a materials testing institute

R&D personnel costs (employer gross)EUR 810,000

Contract research, 70 % of EUR 120,000+ EUR 84,000

Overhead flat rate 20 %+ EUR 178,800

Eligible expensesEUR 1,072,800

Funding rate25 %

Research allowance per yearEUR 268,200

Per year. The assessment base is capped at EUR 12 million, a maximum of EUR 3.0 million allowance at the standard rate, EUR 4.2 million as an SME.

As a rule of thumb: a construction engineer with an employer gross of EUR 80,000 who spends half of the time on eligible projects yields around EUR 16,800 research allowance per year (SME rate, with the overhead allowance — the project starts after 31 December 2025). The whole is capped at an assessment base of EUR 12 million and an allowance of EUR 4.2 million per year. Go to the calculator

Guide: R&D tax credit for the construction industry
The eligibility rules, the sources of evidence and a template for the project description, as a PDF.

What construction companies ask us most often

How does the FZulG distinguish BIM development from routine planning?+

What matters is whether a technical problem was solved whose solution was not readily achievable with off-the-shelf BIM software. Using Revit, ArchiCAD or Allplan for planning as intended is routine, regardless of the model's level of detail. Developing your own collision algorithms, plug-ins or interfaces between systems is eligible as R&D, provided its behaviour was open before development.

Are trials with novel building materials on a prototype or demonstration build eligible?+

Yes, material trials, component tests and demonstration builds for testing novel building materials or construction methods are eligible insofar as they serve to gain knowledge. The direct material cost of the prototype or demonstration build cannot be claimed, however. Eligible are the personnel costs of the engineers involved, 70% of commissioned contract research with materials testing institutes and, since 2024, the depreciation of movable assets used exclusively in the project.

Can the research allowance be combined with KfW or BAFA funding programmes?+

In principle yes, but the anti-cumulation rule applies to the same cost block. The research allowance targets R&D personnel costs, while KfW and BAFA programmes usually fund investment costs, energy efficiency or market launch. A clean separation of cost items is essential to avoid double funding; we review the combination for your specific project.

Is a case-by-case approval (ZiE) a requirement for funding?+

No. The ZiE is a building-law evidence route for construction products without a harmonised standard, not a criterion of the FZulG. Eligible is the test series with which you systematically clarify a previously unknown technical behaviour, regardless of whether the outcome is a ZiE, a European technical assessment, or no approval at all. The test certificates from the ZiE procedure are often strong evidence of systematic approach.

Is the construction work itself eligible?+

No. Building according to approved plans and established codes of practice is the intended service of the construction trade, not its gain of knowledge. A project becomes eligible only once a new construction method, a new building material or a new component geometry raises a technical question that was open before construction began and had to be resolved through testing.

Does a structural verification to Eurocode count as research?+

Generally not. A structural verification with a normative design method has a predictable outcome, even if the calculation is elaborate. What becomes eligible is the share for which no Eurocode design method exists, for instance with novel composite cross-sections or reinforcement types, and which is instead worked out through component testing and simulation.

How far back can construction companies apply?+

Applications for closed financial years from 2022 are possible; the assessment period of the respective year is decisive. For many construction companies a substantial share of eligible development sits in materials or process trials that were never declared as R&D. Retroactive application

How much effort arises in our construction company?+

For a typical construction industry project we reckon with two to four hours on the part of the project or development lead: a technical conversation in which we take up the project, and one approval round on the finished project description. We take over the evaluation of test protocols, design changes and time recording as well as both applications.

How does your documentation become an application?

Your component tests and design changes already document everything the certification office wants to see, just in a different language. Here is the same set of facts in four registers, from the test protocol to the application sentence.

In the test lab — What gets written anyway

Slab system D-CB120, component test 2
Deflection L/260 under sustained load
  // target < L/300, joint too soft

- strain gauge, tie rod . 6 pcs
- prestress ............ rib v2
- test 3 ............... L/340, R90 ok

In conversation — What the team says about it

"The first joint gave way at L/180, that was too soft. Then we prestressed the rib and changed the geometry, and on the third test we were above L/340 and the fire test passed too."

Technically complete and worthless as application text. There is no reference to the state of the art or to the measured variable.

At the BSFZ — What is actually examined

Novelty
Technical risk
Systematic approach

For each of the three criteria the application must contain a verifiable statement. What is described is the knowledge gained on the way to the finished slab.

In the application — What we formulate from it

"For a carbon-reinforced concrete hollow slab with novel column-to-slab joints no design concept existed whose deflection under sustained load at half the component thickness and fire resistance R90 had been demonstrated. Whether the joint stiffness could be sufficiently increased through rib geometry and prestress could not be determined in advance. The project established this in three component tests against a defined target."

This is the work. The same facts, four formulations, and only one of them is an application. This translation is our actual service: building, from what your test lab produces anyway, the statement the certification office can examine. Not writing more beautifully. Writing differently.

Why do applications fail in the construction industry?

Rejected projects from the construction industry rarely fail on their technology. They fail on five recurring patterns, and we see them in self-submitted applications just as in externally assisted ones.

The state of the art is missing

The application describes what was built, not why it could not be done within established codes of practice. Without named standard limits, design methods or catalogue products that fail, the certification office cannot establish novelty. This is the most common reason in our own mandates.

How we do it. We specifically name the design methods, materials and connection techniques that were examined and rejected, each with the technical property on which they fail.

The construction contract is submitted as the project

A building for a client is not excluded per se, but an application covering "the building" forces the certification office to assess construction work and development together. The routine shares drag the whole project down.

How we do it. We scope the project to the component or method for which no established design method existed and cleanly separate construction work, acceptance and documentation.

Project risk instead of technical risk

Construction schedule, budget and trade coordination are not technical risks. Anyone arguing this way describes a management problem and gets it decided as such.

How we do it. We phrase the risk as an open technical question: which property of the component or method was not predictable before the start, and exactly where the project would have failed.

The demonstration build is described as a product

The application reads like a building description: floor area, load capacity, construction time. The certification office is looking for the way there, the component tests that did not work and the measurement that proves the difference.

How we do it. We derive the systematic approach from your own artefacts: design in the calculation report, trial in the test protocol, decision in the change log.

Cost side and facts do not match

The BSFZ certifies the project, the tax office checks the costs. Anyone who claims material costs for the demonstration build, or hours that contradict the project description, loses in the second step, after the certificate has already been issued.

How we do it. We run project description, time recording and research allowance application (ELSTER) against the same scope from the start. The cost side is not created afterwards.

If you already have a rejection, the first step is analysing the decision: which of the five points carries it. That determines whether objection or new application is the right way.

Which other industries use the research allowance?

The sector never decides eligibility — Section 2 FZulG does. These pages show the same three criteria against the activities of each field.

Mechanical engineering — Design, testing, commissioning
Automotive — Drivetrain, battery, driving function
Medical technology — Operating principle, SaMD, pre-approval
Pharma & life sciences — Compound, formulation, bioprocess
Energy & cleantech — Cell, storage, grid control
Aerospace — Structure, propulsion, avionics
Agriculture & FoodTech — Process, formulation, field trial
Software & IT — Algorithm, model, architecture

Send us a test report, not a questionnaire

In the first consultation we talk about your component, not about your legal form. After thirty minutes you know which part of your development is eligible, in what order of magnitude, and whether a retroactive application is worthwhile. The first consultation is free; 30 % of the fee falls due with the BSFZ decision, 70 % only after the allowance has been paid out.

Book a first consultation

Official sources

Read on

Max Nodes

Founder and Managing Director of NOVARIS Consulting. Specialised in the German R&D tax credit (FZulG) since 2021; 25 of 25 accompanied BSFZ applications approved (as of 09/2026). Max Nodes

R&D tax credit for the construction industry: when the component test settles the question

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