How can I save taxes as a property owner?
August 12, 2023 | 50,00 EUR | answered by Zofia Schulz
Dear tax advisor,
I am Jonas Büchner and I own several properties that I rent out. In recent years, I have noticed that my tax burden has been increasing steadily due to the income from rental properties. I am concerned that I am paying too much in taxes and would like to know how I can save on taxes as a property owner.
Currently, I pay income tax on rental income as well as property tax and other ancillary costs for the properties. I have already claimed all possible deductible expenses, such as maintenance costs, management fees, and depreciations. However, my tax burden remains high.
I wonder if there are any other ways to save on taxes. Are there, for example, tax optimization opportunities that I have not yet utilized? How can I reduce my tax burdens as a property owner?
I would like to know if it makes sense to establish a tax-optimized asset structure or if there are other tax-saving opportunities that I should consider. What tax aspects should I consider when renting out my properties in order to minimize my tax burden?
I would greatly appreciate your support and expertise in optimizing my tax burden as a property owner. Thank you in advance for your help.
Sincerely,
Jonas Büchner
Dear Mr. Büchner,
Thank you for your inquiry regarding optimizing your tax burden as a property owner. It is understandable that you are thinking about how to reduce your taxes, especially as your tax burden steadily increases due to rental income. Below, I will outline some ways in which you can save taxes as a property owner.
First and foremost, it is important to mention that you have already claimed deductible expenses such as maintenance costs, management fees, and depreciation. These are important tax-reducing expenses that you should continue to utilize. Additionally, there are other tax optimization opportunities that you can consider.
One way to reduce your tax burden is by using tax-optimized asset structures. For example, you may consider transferring your properties to a GmbH or another corporate form. This can allow you to benefit from tax advantages such as the ability to retain profits or utilize depreciation opportunities. However, it is important to consult with a tax advisor or lawyer beforehand, as restructuring assets involves tax and legal aspects.
Furthermore, you should fully utilize tax depreciation opportunities. These include linear depreciation for buildings or declining depreciation for movable assets. By optimally utilizing these depreciation opportunities, you can further reduce your tax burden.
Another important aspect to consider is the tax regulations for rental income. For example, it is important to accurately record all income and expenses and to check for VAT liability. Additionally, make sure to properly report rental income in your tax return.
In conclusion, it is important to regularly seek advice from a tax advisor to ensure the tax optimization of your properties and asset structure. A tax advisor can provide you with individual tips and recommendations on how to reduce your tax burden as a property owner in the long term.
I hope this information is helpful to you and I am available for any further questions you may have.
Sincerely,
Zofia Schulz
Tax Advisor
