Allocation of interest on debts for owner-occupied and rented houses
The income type is rental and leasing.
My wife and I bought a three-family house in 2012.
One apartment is owner-occupied and the other two are rented out.
Purchase price was EUR 450,000.
External capital of EUR 284,000 (loan 1) for the rented portion and EUR 116,000 (loan 2) for the owner-occupied portion.
Equity EUR 50,000.
Our two loans were paid out to my checking account and then transferred in two parts. One part to the previous owner and the other part for repayment to the lending bank of the previous owner.
The tax office does not recognize the economic connection of our loans. That means loan 1 is not allocated to rental and leasing, and loan 2 is not allocated to the owner-occupied apartment. Only the sum of the interest is proportionally credited according to the floor area (according to a Federal Fiscal Court ruling).
However, the bank explicitly advised us on this and provided the loan interest for the loan for rental and leasing with higher interest rates. This results in not only the rented portion being highly interest-bearing, but also the high interest rates of loan 1 being proportionally distributed to all apartments. This means they are also allocated to the owner-occupied apartment, which was not the intention.
Unfortunately, the division into owner-occupied and rented out is not noted in our purchase agreement.
We only have two arguments:
- The bank advised us in this way (consultation protocol).
- The disbursement was complicated, as the sum of the loans did not correspond to the purchase price. Additional equity had to be transferred as well. Additionally, the disbursement went to two parties, the bank of the previous owner and the previous owner.
Is there a chance to establish the economic connection between loan 1 and rental and leasing after all?
