Do I have to pay taxes if I rent out my second home?
May 29, 2022 | 40,00 EUR | answered by Mia Pilz
Dear tax advisor,
My name is Jan Seiler and I own a second home that I have been using myself so far. Due to a change in my professional situation, I am now forced to rent out the apartment to cover my expenses. However, I am unsure whether I have to pay taxes when renting out the second home.
My concern is that I may have to pay back taxes or that I may be in violation of current tax laws. I would like to comply with all legal regulations and avoid any issues with the tax office.
Could you please explain to me if and what taxes I have to pay when renting out my second home? Are there any possible exceptions or tax allowances that I can take advantage of? What documents do I need to provide and how can I optimize my tax situation?
Thank you in advance for your help.
Best regards,
Jan Seiler
Dear Mr. Seiler,
Thank you for your inquiry regarding the taxation of your second home that you wish to rent out. I understand your concern and will now explain in detail which taxes apply in this case and what options there are to optimize your tax situation.
In general, when renting out a second home, income tax is due, as rental income is considered income from renting and leasing. You must declare this income in your annual tax return. The amount of tax depends on your personal tax rate.
In addition, there are also rental costs that are tax-deductible. These include, for example, maintenance costs, management costs, property tax, and interest on loans taken out to finance the property. These costs reduce your taxable income and thus your tax burden.
There are also tax-free allowances that you can claim to optimize your tax situation. For example, you can claim a standard deduction of €1,000 without having to provide evidence. Furthermore, there are additional allowances for certain costs related to the rental.
To fulfill your tax obligations, you must carefully keep all relevant documents. This includes rental agreements, invoices for incurred costs, receipts for maintenance measures, and all other documents related to the rental. You must be able to present these documents to the tax office upon request.
To optimize your tax situation, I recommend seeking professional help from a tax advisor. A tax advisor can help you accurately record your costs, make use of all tax options, and avoid possible tax pitfalls.
I hope that this information has been helpful to you and I am available for any further questions. Thank you for your trust and I wish you success in renting out your second home.
Sincerely,
Mia Pilz
