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Anticipated deduction of advertising costs before the acquisition of real estate

December 10, 2014 | 30,00 EUR | answered by Tobias Heinrich

I am planning to buy a house with 3 apartments at the beginning of 2015, and rent out all 3 apartments.

Questions:
1) Would it be possible to purchase tools and materials for maintenance measures planned for 2015 still this year, in order to reduce my tax burden for 2014 through anticipated advertising costs from rental and leasing income - or is this only possible once I am actually the owner of the property? The intention to generate income is definitely there. There is already a potential tenant. I could imagine that the tax office would refuse the deduction with the reasoning that I cannot use tools and materials in 2014 yet.

If it is possible: with which legally secure arguments can I explain the anticipated advertising costs deduction to the tax office.

If it is not possible: would it be possible to partially bring forward the planned expenses to 2014 within the framework of an investment allowance deduction?

2) If one of the apartments is rented to my partner (not married) (the other two apartments are rented to third parties), but I move in with her into this apartment, can I also claim advertising costs from rental and leasing income for this apartment? The rental agreement is technically in my partner's name.

Thank you in advance.

Tobias Heinrich

Dear questioner,

In the context of an initial consultation and your fee commitment, in compliance with the regulations of this forum, I would like to answer your question.

1. Basically, anticipated advertising costs can be claimed here (cf. BFH, judgment of 11.1.2005, IX R 15/03, BStBl 2005 II p. 477.), however, it is up to you to prove to the tax office the connection between the expense and the later rental or at least make it plausible.

2. An investment allowance is not provided for the so-called "surplus income". I assume for now that the house is to be held in personal tax assets, so there is no connection with other profit income.

3. Renting out the apartment for ultimately personal residential purposes is not tax deductible. Concealment (lease agreement is only in the name of the life partner) would be tax evasion (criminal offense), for this I must recommend that you seek legal advice (lawyer).

I hope your inquiry is satisfactorily answered. However, I recommend that you engage a paid regular consultation with a tax advisor for such a project, as many factors need to be considered tax-wise and legally when buying a house.

Best regards,
Tobias Heinrich