What depreciation options are available for rented properties?
May 8, 2024 | 40,00 EUR | answered by Mia Pilz
Dear tax advisor,
I am Mia Schmid and I own a rented property. In recent years, I have generated regular income through rental payments. However, I am now faced with the question of what depreciation options exist for rented properties and how I can best utilize them.
My property is in a good location and has a high value that I would like to preserve long-term. Through the rented property, I generate regular income that I must pay taxes on. I have heard that there are ways to reduce the tax burden through depreciation.
My concern is that I may not be aware of all the depreciation options and as a result, I may end up paying unnecessarily high taxes. I would like to fully utilize all legal options to minimize my tax burden and maximize my income.
So my question to you is: What depreciation options are available for rented properties and how can I best utilize them to reduce my tax burden? Are there any specific regulations or requirements that I need to consider? I want to ensure that I make full use of all possibilities to manage my rented property in a tax-optimized way.
I look forward to your expert advice and thank you in advance for your support.
Best regards,
Mia Schmid
Dear Mrs. Schmid,
Thank you for your inquiry regarding depreciation options for rental properties. It is very positive that you are actively engaging with the topic of tax optimization and would like to manage your rented property successfully in the long term.
There are various depreciation options available for rental properties that you can use to reduce your tax burden. The most important depreciation option is straight-line depreciation. In this method, the value of the property is depreciated over a period of 50 years. This depreciation method allows you to claim a portion of the acquisition cost as deductible expenses each year, thereby reducing your taxable income.
In addition to straight-line depreciation, there is also the option of special depreciation. This special depreciation can be claimed for new constructions or extensive renovation measures and amounts to up to 9% of the acquisition or production costs in the first years. By utilizing special depreciation, you can further reduce your tax burden in the initial years.
Furthermore, there is also the option to depreciate parts of the building that do not belong to the actual living space, such as garages or garden facilities. These can be depreciated separately, providing additional opportunities to reduce the tax burden.
To fully utilize the depreciation options, it is important to accurately document all costs and investments related to your rented property. This includes not only acquisition or production costs but also all maintenance and modernization costs. Only with all relevant information available can you maximize the depreciation options.
It is also advisable to regularly seek advice from a tax advisor to ensure that you are correctly implementing all legal requirements and tax regulations. A tax advisor can help you manage your rented property in a tax-efficient manner and make the most of all depreciation options.
I hope this information is helpful to you and I am available for any further questions you may have.
Best regards,
Mia Pilz, Tax Advisor
