Deductibility of ancillary acquisition costs for temporary rental
May 27, 2011 | 40,00 EUR | answered by Michael Herrmann
Dear experts,
I am planning to buy a used single-family house for myself and my family. The seller, who currently still lives in the property, will continue to occupy the house for another three-quarters of a year. In addition to the option of transferring the purchase price and ownership only at the time of his departure, we (buyer and seller) are also considering the option of doing so now, and renting the house to the seller for the temporary period.
I assume that I can/must deduct the rental income minus the straight-line depreciation or the mortgage interest for this period of renting for tax purposes.
Now my question: Can I also fully deduct the acquisition costs (real estate transfer tax/real estate agent commission/notary fees) as expenses, even if the property is only rented out for 7-9 months, and it is already obvious that I will move in afterwards? Is this at the discretion of the tax office (as so many things...) or is there a clear legal regulation?
Thank you for your answer.
Sincerely,
The questioner
Dear inquirer,
First of all, thank you very much for your inquiry, which I am happy to answer based on the information you provided and in the context of your initial consultation. The response is based on the facts presented. Missing or incorrect information about the actual circumstances can influence the legal outcome.
As you correctly assume, as long as the seller is living in the apartment rent-free, you will generate income from renting and leasing. During this period, you will pay taxes on the rental income and can deduct the costs.
The ancillary acquisition costs are to be attributed to the acquisition costs and are only to be considered within the framework of depreciation. Acquisition costs are, according to § 255 para. 1 HGB, the expenses incurred to acquire an asset and put it into a usable condition, as far as they can be individually assigned to the asset.
The derived legal basis in tax law can be found in R 7.3 of the income tax guidelines. The issue is completely undisputed, so no discretionary decision by the tax office is to be expected.
I hope that these details have provided you with an adequate overview of the situation in the context of your initial consultation, and I remain
Yours sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor
