How are revenues from the rental of garages treated for tax purposes?
May 5, 2022 | 40,00 EUR | answered by Lorenzo Hartmann
Dear Tax Consultant,
My name is Robert Hausdorf and I have recently started renting out several garages that I own. I have heard that income from garage rentals must be treated for tax purposes, but I am unsure of how exactly this works. I have no prior experience with garage rentals and therefore I am feeling uncertain about the tax aspects.
Currently, I am earning monthly income from renting out the garages, which I would like to accurately report in my tax return. However, I am unsure if and how I need to declare this income for tax purposes, and if there are any specific regulations or tax benefits for garage rentals.
I am concerned that I may be doing something wrong and could face tax consequences as a result. Therefore, I would be grateful if you could explain to me how income from garage rentals is treated for tax purposes and what specific steps I need to take to fulfill my tax obligations.
Could you also please provide me with potential solutions on how to correctly report my income from garage rentals in my tax return and what tax implications this could have on my overall situation?
Thank you in advance for your support and advice.
Kind regards,
Robert Hausdorf
Dear Mr. Hausdorf,
Thank you for your inquiry regarding the tax treatment of income from renting out garages. It is understandable that you may feel unsure, as this is a new area for you. I will now explain in detail how revenue from renting out garages is treated for tax purposes and what steps you need to take to fulfill your tax obligations.
In principle, income from renting out garages must be declared in your tax return as rental income. This income is subject to income tax and must be taxed accordingly. The amount of tax depends on your individual tax rate, which in turn is based on your total income.
To correctly report your income in the tax return, you must first add up all rental income you receive monthly from renting out the garages. This includes any advance payments for additional costs or other income related to the rental. You must then report these total earnings in the "Anlage V" section of the tax return.
In addition to income, you can also deduct certain expenses related to renting out the garages from your taxes. These may include maintenance costs, repairs, insurance, or management fees. These expenses reduce your taxable income and therefore have a tax-saving effect.
It is important to keep a clean record of all income and expenses in order to be able to prove that you have fulfilled all tax obligations in case of an audit by the tax office. Additionally, make sure to submit your tax return on time to avoid possible sanctions.
Regarding tax benefits for renting out garages, there are no specific regulations. Income from renting out property is generally subject to income tax, as mentioned earlier. However, it is advisable to seek advice from an experienced tax advisor to explore possible tax optimization opportunities.
I hope this information has been helpful to you. If you have further questions or require individual advice, I am at your disposal.
Best regards,
Lorenzo Hartmann
