How does depreciation (AfA) work for rental properties?
January 12, 2023 | 50,00 EUR | answered by Ralf Otten
Dear tax advisor,
My name is Christiane Schwaru and I have a question regarding depreciation (AfA) for rental properties. I have owned several rental apartments for several years and I am unsure about how AfA works in this case.
I am currently preparing my income tax return for the past year and want to make sure I can take advantage of all possible tax benefits. I have heard that AfA is an important part of tax depreciation for rental properties, but I am not sure how it works exactly.
My concern is that I may not be utilizing all opportunities for tax relief through AfA and therefore may end up paying unnecessary high taxes. Therefore, I would like to know from you how to correctly calculate AfA for my rental properties and how to accurately report it in my income tax return.
Can you explain to me how AfA works for rental properties and what requirements I need to meet to claim it? Are there specific deadlines or maximum amounts that I need to be aware of? And what documents do I need to correctly report AfA in my tax return?
Thank you in advance for your support and advice.
Kind regards,
Christiane Schwaru
Dear Mrs. Schwaru,
Thank you for your question about depreciation (AfA) for rented properties. As a tax advisor, I have a lot of experience with this topic and would be happy to help you.
AfA is a tax depreciation option that landlords of properties can use to deduct the acquisition or production costs of the property over the useful life for tax purposes. AfA allows you to deduct the costs of acquiring or producing a rented property over a certain period of time for tax purposes and thus reduce the tax burden.
The calculation of AfA is based on the acquisition or production costs of the property. These costs are divided by a certain useful life to determine the annual depreciation amount. The useful life varies depending on the type of property, for example, residential buildings typically have a useful life of 50 years.
To claim AfA, you must rent out the property and generate rental income. Additionally, you must include AfA in your income tax return and provide supporting evidence of the acquisition or production costs of the property, such as invoices, purchase contracts, or appraisals.
There are no deadlines or maximum amounts for AfA, but you should ensure that AfA can only be claimed until the full deduction of the acquisition or production costs. Therefore, it is important to continuously claim AfA in subsequent years until the total costs are depreciated.
In your income tax return, you must include AfA in Appendix V (Income from Rental and Leasing) and document the corresponding amounts and underlying costs. It is important to provide all relevant information correctly and completely to avoid tax issues.
I hope this information helps you and answers your question about AfA for rented properties. If you have any further questions or need assistance, I am happy to help.
Sincerely,
Ralf Otten
