diff --git a/poetry/core/masonry/builders/builder.py b/poetry/core/masonry/builders/builder.py
index c6f6d9cd6..d29c03040 100644
--- a/poetry/core/masonry/builders/builder.py
+++ b/poetry/core/masonry/builders/builder.py
@@ -153,8 +153,10 @@ def find_files_to_add(
                 if "__pycache__" in str(file):
                     continue
 
+                # this should be moved to Include.check_elements(), similar
+                # to PackageInclude.check_elements()
                 if file.is_dir():
-                    if self.format in formats:
+                    if self.format in formats:  # why check this only for dirs?
                         for current_file in file.glob("**/*"):
                             include_file = BuildIncludeFile(
                                 path=current_file,
@@ -163,8 +165,9 @@ def find_files_to_add(
                             )
 
                             if not current_file.is_dir() and not self.is_excluded(
-                                include_file.relative_to_source_root()
+                                current_file.relative_to(self._path)
                             ):
+                                logger.debug("Adding: {}".format(str(current_file)))
                                 to_add.add(include_file)
                     continue
 
@@ -181,9 +184,7 @@ def find_files_to_add(
                     path=file, project_root=self._path, source_root=source_root
                 )
 
-                if self.is_excluded(
-                    include_file.relative_to_project_root()
-                ) and isinstance(include, PackageInclude):
+                if self.is_excluded(file.relative_to(source_root)):
                     continue
 
                 if file.suffix == ".pyc":
diff --git a/poetry/core/vcs/git.py b/poetry/core/vcs/git.py
index c060ec060..7bb9c0755 100644
--- a/poetry/core/vcs/git.py
+++ b/poetry/core/vcs/git.py
@@ -256,8 +256,9 @@ def get_ignored_files(self, folder=None):  # type: (...) -> list
 
         args += ["ls-files", "--others", "-i", "--exclude-standard"]
         output = self.run(*args)
+        dotgit = list(str(path.relative_to(folder)) for path in folder.rglob(".git/*"))
 
-        return output.strip().split("\n")
+        return dotgit + output.strip().split("\n")
 
     def remote_urls(self, folder=None):  # type: (...) -> dict
         output = self.run(