What tax reliefs are available for renovation measures on my property?
September 14, 2022 | 40,00 EUR | answered by Tatiana Seiler
Dear Tax Advisor,
My name is Albrecht Vollbrecht and I own a property that I would like to renovate. The property is in rather poor condition and I am aware that renovation measures are necessary to maintain and potentially increase the value of the property.
My concerns mainly lie in the fact that the costs for the renovation could be very high and I would like to know if there are any tax reliefs that could help me with financing the renovation measures. I am unsure if I am taking advantage of all possible tax benefits and would therefore like to know from you what specific tax reliefs are available for renovation measures on properties.
My current situation is that as the owner of the property, I have to bear the renovation costs alone and I am looking for ways to deduct or at least reduce these costs for tax purposes. The current state of my property urgently requires renovation measures to maintain and increase its value in the long term. Therefore, it is of great importance for me to consider all tax aspects related to the renovation.
Could you please explain in detail what specific tax reliefs are available for renovation measures on my property and how I can take advantage of them? I am very grateful for your professional advice and look forward to learning from you how I can optimally benefit from the tax advantages of the renovation measures on my property.
Thank you in advance for your support.
Kind regards,
Albrecht Vollbrecht
Dear Mr. Vollbrecht,
Thank you for your inquiry regarding the tax aspects of renovation measures on your property. It is understandable that you are concerned about the financing of renovation costs and are looking for ways to deduct or reduce them for tax purposes. I am happy to explain to you the specific tax relief options available to you for renovation measures on your property.
First of all, it is important to know that renovation costs are generally considered maintenance expenses and can therefore be deducted for tax purposes. This means that the costs for renovation can be deducted as advertising costs from rental and leasing income. It is important to note that costs for purely cosmetic repairs are generally not deductible, while costs for repairs and maintenance work can be considered for tax purposes.
Furthermore, there is the option to claim renovation costs as part of the so-called "acquisition-related production costs." These are costs that arise within three years after the acquisition of the property for construction work that goes beyond mere maintenance measures. These costs can be spread over a period of 50 years through the depreciation of the building and can therefore be claimed for tax purposes.
In addition, there are various funding programs and tax relief options that may vary depending on the federal state and municipality. These include programs to promote energy-efficient renovation measures or monument preservation. Therefore, it is worthwhile to inform yourself about the possible funding opportunities in your region and take advantage of them.
To fully utilize all tax benefits, I recommend consulting with an experienced tax advisor. They can help you accurately capture and deduct all relevant costs for tax purposes, as well as assess potential funding programs for renovation measures.
I hope that this information is helpful to you and wish you success in the renovation of your property. If you have any further questions, please do not hesitate to contact me.
Best regards,
Tatiana Seiler
Tax Advisor
