How can I reduce my tax burden through clever structuring of my rental property?
December 30, 2022 | 40,00 EUR | answered by Johann Lauer
Dear Sir or Madam,
my name is Emma Endres and I have been running a holiday rental business in a touristic area for several years. So far, I have always kept my tax return quite simple and just reported the income from the rentals. However, I feel like I may have overlooked tax benefits and deductions that could help me reduce my tax burden.
Currently, I am paying a significant portion of my rental income to the tax office and I am wondering if there are ways to reduce my tax burden through clever structuring of my rentals. I have heard that there are various tax benefits available to landlords, such as depreciation, advertising costs, or special deductions. However, I am unsure how to apply these tax regulations specifically to my rental business.
Therefore, I would like to know what specific measures I can take to reduce my tax burden and maximize all tax opportunities. Are there any specific regulations or laws that I should consider in my situation? Can a specific rental strategy help me gain tax benefits? What documents and evidence do I need to prepare and submit for this?
I would greatly appreciate your professional advice and support to optimize my tax situation and make my rental business tax-efficient.
Thank you in advance.
Sincerely,
Emma Endres
Dear Mrs. Endres,
Thank you for your inquiry regarding the tax optimization of your vacation rental properties. As an experienced tax advisor for rental and leasing, I can provide you with some tips and recommendations to reduce your tax burden and maximize tax benefits.
First and foremost, it is important that you carefully document your rental income and expenses and keep all relevant receipts. Deductible advertising costs include maintenance and renovation costs, administrative expenses, insurance premiums, property tax, garbage collection fees, as well as depreciation on the buildings and furnishings of the vacation rentals.
Depreciation is an important tax advantage for landlords, as you can deduct the acquisition costs for buildings and furnishings over the useful life from taxes. Special depreciation allowances may also be available in some cases, for example for energy-efficient renovation measures.
A savvy rental strategy can also help reduce your tax burden. For example, you may consider whether it is worthwhile to rent out your vacation rentals furnished or unfurnished, as this can have different tax implications. The choice of rental type (e.g. short-term rental vs. long-term rental) can also affect your tax situation.
It is advisable to regularly inform yourself about current tax regulations and laws related to your rental property. A tax advisor can help you maximize all tax opportunities and ensure that you do not overlook any tax benefits.
I recommend scheduling a personal consultation to analyze your individual tax situation and discuss specific measures for tax optimization. I am happy to offer my expertise to assist you with the tax planning of your rental properties.
Best regards,
Johann Lauer
