What happens tax-wise when I market my property?
July 18, 2023 | 50,00 EUR | answered by Mia Pilz
Dear tax consultant team,
my name is Anna Engel and I own a property that I would like to rent out. However, I am unsure about the potential tax implications this could have for me. I have previously used the property for personal use, but due to a move, I now want to rent it out.
My concern is that I may have to pay high taxes or that I may be doing something wrong that could lead to issues with the tax authorities. I have already done some research on the internet, but the information is often very confusing and I am unsure about the specific regulations that apply to me.
Could you please explain to me how the taxation of rented properties works? Are there ways to save on taxes or to deduct certain costs for tax purposes? What steps do I need to take to act correctly in terms of taxation and avoid potential risks?
Thank you in advance for your help and support.
Sincerely,
Anna Engel
Dear Anna Engel,
Thank you for your inquiry and interest in the taxation of rented properties. I understand your concerns regarding possible tax consequences and would like to explain how taxation works in your case.
When you rent out a property, income from rental and leasing is generated, which must be declared in your annual tax return. Rental income is taxed after deducting deductible expenses. Deductible expenses include, for example, loan interest, repair and maintenance costs, management fees, property tax, insurance, and building depreciation.
It is important to carefully document all relevant costs in order to claim them for tax purposes. By considering deductible expenses, you can reduce your tax burden and save on taxes. Therefore, it is advisable to keep all receipts and invoices and keep an accurate record of expenses.
Furthermore, there are also opportunities to take advantage of tax benefits through special depreciation or deductions. However, it is important to adhere to the respective regulations and requirements in order to act in a tax-compliant manner.
To avoid potential risks and ensure tax compliance, I recommend contacting a tax advisor early on. A professional tax advisor can provide you with tailored advice, explain your tax obligations, and help you find tax-efficient solutions.
In summary, the taxation of rented properties is a complex issue where it is important to consider all relevant aspects and seek expert advice. With careful planning and documentation, you can take advantage of tax benefits and minimize potential risks.
I hope this information is helpful and I am available to answer any further questions you may have.
Best regards,
Mia Pilz
