Ask a tax advisor on the topic of Real estate taxation

Tax for property rental

February 4, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

I am not registered in Germany. I live in Dubai. I would like to buy an apartment in cash and rent it out for profit. How much tax do I have to pay on the income from the profit? 4440 euros annual rent income.

Dipl.BW/SB Ulrich Stiller

Dear client,

Thank you for your information, which I would like to answer based on your details and in the context of your inquiry for initial consultation as follows:

If you do NOT have a residence or habitual abode in Germany, you are subject to limited income tax liability in Germany with income earned in Germany. This includes income from rental and leasing activities.

From the rental income, you can deduct expenses such as depreciation, interest on loans, repairs, property insurance, property tax, etc. Assuming these expenses amount to 2000 euros, taxable income of 2,440 euros is calculated. The taxation is based on the basic tax table, regardless of marital status. For individuals with limited tax liability, the basic tax-free allowance of currently 8,004 euros is not granted. It is added to the 2,440 euros, resulting in a taxable income of 10,440 euros. The income tax on this amount is 395 euros, with no solidarity surcharge.

Best regards,

Ulrich Stiller
Tax consultant/Diploma in Business Administration