Rented out to strangers for 9 years, now being used by ourselves again.
April 19, 2012 | 30,00 EUR | answered by Michael Herrmann
Hello, I built a multi-family house in 2003/2004. I currently live in the smaller ground floor unit, and I have been renting out the larger first floor/attic unit as well as a space for an office on the ground floor. I have been able to deduct the interest on the construction loan that serves the first floor/attic unit up to now, and I had a tax-free allowance entered on my tax card. The tenant will soon be moving out, and I want to move into the larger unit on the first floor/attic myself. Only the 1-room office will be rented out to someone else in the house, everything else I will be using myself.
How will this new situation affect me financially? Will there be any additional payments or will my tax-free allowance simply be set to zero and the interest on the loan no longer be deductible?
Dear questioner,
First of all, thank you very much for your inquiry, which I would be happy to answer based on the information provided and in the context of your initial consultation. The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
The costs for the house are only deductible if the expenses are incurred within the scope of rental and leasing income and are economically related to them.
If the house is not rented out, the costs (depreciation, interest payments, ongoing costs) are not tax deductible. An exception is 20% of the labor costs for craftsmen's services, which can be deducted directly from income tax. In return, of course, no rental income needs to be taxed.
I hope that with this information, I have provided you with a sufficient overview of the situation in the context of your inquiry and this initial consultation, and remain
Yours sincerely,
Michael Herrmann
Graduate Financial Economist (FH)
Tax advisor
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