Lease agreement/loan agreement/real estate appraisal
July 11, 2012 | 25,00 EUR | answered by Wirtschaftsprüfer André Hintz
The following initial situation.
I am the managing director of a Ltd, whose registered office is in my private house.
For tax purposes, only one office has been deducted from my personal income tax return so far to avoid my private property being somehow tax considered as part of the business and thus disadvantaged (e.g. taxation of capital gains/ repayment of tax benefits, etc.).
Now I want my company to operate a solar system on the roof of my house. For this purpose, my company is to receive a loan from my partner (not wife) at an interest rate of 5%.
Now the questions.
Is the solution with the loan feasible and/or what mistakes/dangers lurk here?
Can my company operate the solar system on my roof without any tax disadvantages for me personally and in relation to my private property?
Must or can a lease agreement for the roof space be concluded in this context and if so, do I have to conclude it with the company and would an annual amount of €50 be sufficient enough (small system approx. 40sqm)?
Is there anything else I have forgotten or not adequately considered in this scenario?
Dear inquirer,
I would like to answer your question within the framework of an initial consultation and your fee commitment, in accordance with the rules of the online portal. My response is based on the situation you have presented.
If your company receives a loan from your friend, you must document this in writing. The contract must include all conditions and cannot be changed continuously. The comparison to third parties must be maintained.
The interest rate, disbursement date, repayment agreement, and termination clause must be included in the contract and adhered to. This means that payment flows must be followed, and a shortened payment route (your friend paying a bill) is not allowed and often leads to issues with the tax office.
The interest rate of 5% seems very high given the current market conditions. Depending on the term of the loan, you should align with the current conditions of bank loans and verify this, perhaps by making an inquiry at a bank and attaching the documents as evidence to the contract.
Your company can install a solar system on your roof, as long as this is agreed upon in writing through a contract between you (homeowner) and your company. Here too, it is important to maintain comparison to third parties. A lease agreement for 50 euros per year seems very unrealistic to me. It is more likely to be a monthly rent of at least 50 euros depending on the property location. A benchmark could be a parking rent in your area. Again, it is important that payment flows between your company and you are upheld.
The consequence for you, however, is that you will generate rental income and must declare this in your tax return. The portion of the roof that you rent out is therefore subject to taxation. However, you can proportionally claim the costs of the house.
I hope my explanations have been helpful to you and remain
Yours sincerely,
André Hintz
Tax Advisor
Steuerberatung@andrehintz.de
