Do I have to pay taxes on my rental income if I only rent out a portion of my property?
December 4, 2023 | 40,00 EUR | answered by Lucas Krebs
Dear tax advisor,
My name is Erika Ullmann and I own a property that I partially rent out. The property consists of three individual units, of which I rent out one and use the other two myself. Now I am wondering if I have to pay taxes on the rental income from the rented unit, even though it is only a part of my property.
So far, I have not declared the rental income from the rented unit, as I assumed it was a minor rental and therefore not subject to taxation. However, I am not sure if this assumption is correct and if I may have to pay taxes retroactively.
I am concerned that I may have to make tax payments that I have not planned for. Therefore, it is very important for me to know if I have to declare the rental income from the rented part of my property and how I should best proceed in this situation.
Could you provide me with further information and suggest possible solutions? I would be very grateful for your assistance.
Kind regards,
Erika Ullmann
Dear Mrs. Ullmann,
Thank you for your question regarding the taxation of rental income from a leased portion of your property. It is understandable that you are concerned and want to make sure you are handling this situation in the best way.
In general, rental income from leasing and renting out property is taxable. This means that you must declare and pay taxes on the income from the leased unit in your tax return. It does not matter whether it is the entire property or just a portion of it. Even with a minor rental, there is generally a tax obligation.
It is important that you declare the rental income from the leased unit in your income tax return so that the tax office can take these income into account. If you have not done this yet, you may need to make tax payments. In this case, you should contact a tax advisor or the tax office to clarify the matter and possibly make a declaration of the income.
To avoid possible tax payments in the future, it is advisable to properly declare all income from leasing and renting out property in your tax return. You can also check if you can claim certain deductible expenses to reduce your tax burden.
I recommend that you consult with a tax advisor in this matter, who can assist you in optimizing the tax treatment of your rental income. Together, you can find the best solution for your tax situation and avoid possible tax payments.
I hope this information has been helpful to you and I am available to assist you with any further questions.
Sincerely,
Lucas Krebs
