Apartment in Germany / Living abroad
January 24, 2011 | 25,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Dear Sir or Madam,
I have been deregistered from Germany since 01.08.2010 and now live in Egypt.
I own an apartment in Germany which still has a debt of approximately 118,000 euros.
I need to take out a new loan by 01.04.2011.
As I am only subject to limited tax liability in the federal territory, but do not want to pay taxes on interest income and rental income, I have the following question for you:
The apartment has a monthly rent of 1027 euros (cold 800 euros).
I have attached the following offers in the appendix. The term is 2 or 5 years.
Which percentage and term should I choose for repayment?
How much can I still deduct for the year 2010 and 2011?
It is crucial that I do not want to pay little or no tax in Germany.
Do you believe that the interest rate will change and I should choose a term of 5 years or rather 2 years?
Please provide a brief response.
Best regards.
Dear advice seeker,
Thank you for your inquiry, which I would like to answer based on the information you provided and considering your situation in the context of an initial consultation as follows:
No one can predict the interest rate development. If you want security, then you should consider a 5-year fixed interest rate with a 1% repayment by April 30, 2016. However, I cannot make this decision for you.
If you do not have any other income in Germany, only the income from rental and leasing is subject to limited income tax liability. Since you can deduct advertising costs from rental income and the basic tax table is used for taxation, according to current legislation, you should not expect any income tax burden from 2011 onwards as the taxable income is below the basic tax allowance of 8,004 euros.
Best regards,
Ulrich Stiller
Tax advisor/Diploma in Business Administration
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