How does renting out my property affect my income tax?
April 1, 2024 | 50,00 EUR | answered by Petra Höfer
Dear tax advisor,
my name is Jessica Maier and I recently acquired a property that I would like to rent out. However, I am unsure of how the rental income will affect my income tax and what tax aspects I should consider.
Currently, I am employed and receive a regular income. I hope to generate additional income through renting out the property, but I am not sure how this will be treated for tax purposes.
My main concerns are that I do not know exactly what expenses I can deduct for tax purposes and how the rental income will affect my tax burden. I also wonder if there are specific duties I must fulfill as a landlord or if there are any special regulations I should be aware of.
Could you please explain to me how renting out my property will affect my income tax? What tax aspects should I consider and what expenses can I deduct for tax purposes? Are there any special regulations or duties that I must fulfill as a landlord?
Thank you in advance for your assistance.
Best regards,
Jessica Maier
Dear Mrs. Maier,
Thank you for your inquiry regarding the tax aspects of renting out your property. As a tax advisor specializing in rental and leasing matters, I am happy to assist you and provide you with detailed information.
In general, rental income from a property is subject to income tax. The income must be declared in your annual tax return. It is important to note that rental income is considered income from rental and leasing activities and must be listed in appendix V of the tax return.
In addition to rental income, certain expenses related to the rental can be tax deductible. These include maintenance and repair costs, management fees, insurance premiums, advertising costs, depreciation on the property, and interest costs on loans taken out to finance the property. These expenses reduce your taxable income and can therefore reduce your tax liability.
As a landlord, it is important to be aware of certain tax regulations. For example, you are required to declare rental income in your tax return and provide evidence of related expenses. You must also check for VAT liability if you rent out furnished apartments. Additionally, paying property tax and accurately billing operating costs to your tenants are important aspects that you should consider as a landlord.
Overall, it is important to keep an eye on all tax aspects of renting out your property and seek advice from a tax advisor if necessary. This can help you make the most of potential tax benefits and avoid any tax pitfalls.
I hope this information is helpful and answers your questions. If you need further assistance or have specific questions, please feel free to contact me.
Best regards,
Petra Höfer
Tax Advisor
