How can I renovate my property in a tax-efficient way?
February 5, 2023 | 50,00 EUR | answered by Tatiana Seiler
Dear tax advisor,
I am faced with the challenge of renovating my property in a tax-efficient manner and urgently need your support.
My property is a single-family house that I rent out. It is an older building that is in urgent need of renovation. I would like to carry out some urgent renovation work to maintain the value of the property and attract potential tenants.
I am wondering which renovation works are tax deductible and how best to proceed to find tax-efficient solutions.
I am concerned that I may incur costs for the renovation work that may not be tax deductible later, or that I may make mistakes that lead to disadvantages in taxation.
Are there ways to plan and carry out the renovation work in such a way that I benefit from tax advantages? What steps should I take and what costs can I claim for tax purposes?
I am grateful for your help and look forward to hearing from you on how I can renovate my property in a tax-efficient manner.
Sincerely,
Leon Schlüter
Dear Mr. Schlüter,
Thank you for your inquiry regarding the tax-efficient renovation of your rented property. It is understandable that you are considering which renovation works are tax-deductible and how you should proceed to take advantage of potential tax benefits. I would like to provide you with some information to help you plan your renovation measures optimally.
First of all, it is important to know that renovation and modernization works on rented properties are generally tax-deductible. This includes, for example, painting work, the replacement of floor coverings, the renovation of bathrooms and kitchens, the renewal of the heating system, roof renovation, and much more. Even cosmetic repairs such as painting walls or repairing minor damages can be claimed for tax purposes.
To achieve tax benefits in the renovation of your property, you should consider some points. First of all, it is important that you carefully document all renovation measures. This includes invoices, cost estimates, photos before and after the works, and a detailed description of the measures carried out. This documentation is important in order to be able to claim the costs for tax purposes later on.
Furthermore, you should ensure that the renovation works are carried out in accordance with tax regulations. For example, only actually incurred costs can be deducted, undeclared work is not allowed, and the costs for cosmetic repairs can only be deducted to a certain extent.
To maximize the tax benefits in the renovation of your property, I recommend seeking advice from an experienced tax advisor. A tax expert can help you accurately record costs, find tax-efficient solutions, and avoid potential errors.
Overall, it is indeed possible to carry out renovation works on your rented property in a tax-efficient manner. With the right preparation, documentation, and guidance, you can deduct the costs for tax purposes and thus reduce your financial burden.
I hope that this information is helpful to you and I am available for any further questions. I wish you success in the renovation of your property and in taking advantage of the tax benefits.
Best regards,
Tatiana Seiler
Tax Advisor
