holiday apartment
March 10, 2011 | 50,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
We have had a holiday apartment for ten years, which we regularly rent out to holiday guests (without personal use). We would now like to take the holiday apartment out of rental and use it ourselves. Is this possible? What do we need to consider? Thank you very much!
Dear customer,
Thank you for your inquiry, which I would like to answer based on the information provided and in the context of your commitment within the framework of an initial consultation as follows:
The exclusive rental of a holiday apartment can lead to income from business operations or rental and leasing income.
Income from business operations would exist if the provision of the holiday apartment for rental goes beyond normal asset management, which is explained by the following conditions, ALL OF WHICH must be met:
1. It must be a fully furnished apartment.
2. The apartment must be located in a purely holiday area.
3. The advertising and management of the apartment must be carried out by a holiday organization.
4. The apartment must be kept ready for rental at all times, and personnel must be available to conclude rental agreements, similar to a hotel reception.
If ALL of these 4 conditions are met, you will generate income from business operations. Exclusive self-use would then result in a withdrawal gain subject to income tax.
If you do not have a business operation, then you will generate rental and leasing income, and the apartment belongs to your personal assets, which I assume is the case for you.
You probably incurred losses from rental and leasing in the past years. If you exclusively rented the apartment to various holiday guests, you will retain the losses from the past, as the case law of the Federal Fiscal Court assumes that you ultimately generate a surplus of income, even if you have reported losses for a long time. Only if the rental period of the apartment falls below 25% of the local rental time, for which you are required to provide evidence, must a prognosis be made, but only to the extent that the decisions can be changed based on the provisions of the Tax Code.
In general, therefore, in the case of exclusive rental of a holiday apartment to various holiday guests within the category of rental and leasing income, self-use does not lead to any tax disadvantages, especially since there is no taxable withdrawal gain due to self-use after abandoning the category of rental and leasing income, as the holiday apartment belongs to personal assets.
I hope I was able to assist you.
Best regards,
Ulrich Stiller
Tax consultant/Diplom-Business Economist
