Proportional deduction of maintenance expenses
June 10, 2011 | 50,00 EUR | answered by Matthias Wander
I own a single-family house (built in 1896) with a rented granny flat, which accounts for 20.84% of the living space.
In my income tax return, I claimed a total of 20.84% of 82,827 euros for CO2 renovation costs of the house as maintenance expenses for the granny flat.
The following renovations were carried out:
- The roof
- The exterior walls with a thermal insulation layer
- All doors and windows
- The living room floor, which had to be redone due to the window installation.
The notice states, "Maintenance expenses have been reduced by 21,632 euros, which are fully attributable to the main apartment (windows, parquet)."
This probably refers to the windows that are not located in the granny flat. Do I have to accept this or is the thermal renovation not a collective project that cannot be allocated to individual apartments?
I would appreciate a concise wording for an objection.
Dear Seeker,
Thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your efforts in an initial consultation.
The renovation you carried out should not be considered as a whole. Each individual service should be assessed separately.
Firstly, maintenance expenses, to the extent possible, will be allocated to the individual apartments. Only expenses that cannot be clearly assigned (such as roof, facade) will be allocated proportionally based on the ratio of the area.
The tax office is correct in stating that expenses that can be clearly assigned to your self-occupied apartment cannot be recognized as advertising costs. The doors and windows of the granny flat are considered advertising costs. If the floor in the granny flat was also renovated, this applies as well.
The costs allocated to your apartment (even proportionally) can be considered as craftsman services according to § 35a EStG for tax purposes. However, only the labor costs and the craftsman's travel costs are eligible. Material costs are not eligible under § 35a EStG. It is a requirement that the invoice has been paid by bank transfer. A bank transfer receipt as proof of payment must be presented to the tax office upon request.
If craftsman services according to § 35a EStG have not been declared so far, you should file an objection and declare them retroactively. An objection against the general reduction of advertising costs from rental and leasing will not be successful. However, you should check the amount of the reduction, as the costs for the doors and windows and possibly the floor in the granny flat are considered advertising costs.
I hope this provides you with an initial overview.
Kind regards,
Wander
Tax consultant
