Can window replacement be deducted?
July 12, 2009 | 25,00 EUR | answered by Irmingard Huber-Stempfel
I bought a rented condominium on January 1, 2009. By August 1, 2010, I must move into the apartment myself and renovate/remodel it beforehand. Therefore, I have signed a rental termination agreement with the tenant for December 31, 2009. Now I would like to replace the old windows with thermal insulation windows in 2009. How can I deduct this from taxes? Yesterday, the tenant terminated the lease prematurely and will move out on August 15, 2009. Would there still be a tax benefit if I replace the windows before the move-out? If I cannot deduct it as a landlord, what can I deduct as the owner? Can one deduct the craftsman only for the self-occupied apartment, right?
Dear inquirer,
Thank you for your interest in our forum. I will answer the questions as part of the initial consultation. Adding or omitting facts can influence the legal outcome.
1. Costs of window replacement as rental income expenses
The deduction of rental income expenses requires an intention to generate income from renting. The vacancy of an apartment is assessed based on the subsequent use after the vacancy. In your case, this means: There is an intention to rent until the tenant moves out. However, the window replacement is not done with the intention of renting out, but for subsequent personal use. This means: You will not be able to claim these costs as rental income expenses in 2009, as the tenant moves out shortly after and you will not generate any income from renting. The only exception is if the tax office employee does not notice this when processing the tax return. You can only deduct renovation costs as rental income expenses if a rental follows afterwards.
2. According to § 35a EStG, craftsman services are favored at a rate of 20%, up to a maximum of €1,200 per year, i.e. a maximum of €6,000 for craftsman services. Craftsman services include labor, travel costs, dirt allowance, and the corresponding VAT. Material costs are not deductible. The invoice should be divided into material costs and labor.
The expenses must pertain to the own household. This can also be a secondary, weekend, or vacation household.
The payment must be transferred to the craftsman's bank account. Cash payment is detrimental for tax purposes.
The deduction amount is subtracted from the tax. This means, with the maximum deduction, you save €1,200 in taxes.
The tax relief can be claimed in the year of payment. If you want to claim expenses for the windows in 2009, you must establish a household in the property. This would be advisable. Then you can allocate the remaining renovation costs in 2010 and save up to €1,200 twice from the construction measures.
If you have any further questions or if the answer is not clear, you have the opportunity to inquire once.
Best regards,
I. Huber-Stempfel
Lawyer and Tax Advisor
