How does renting out real estate affect my income tax?
February 6, 2022 | 40,00 EUR | answered by Johann Lauer
Dear tax advisor,
my name is Christian Meier and I have been a landlord of two properties for several years. So far, I have declared the rental income in my tax return, but recently I have been concerned whether I am doing everything correctly and if I might be overlooking tax benefits.
I am currently unsure about how the rental of my properties affects my income tax. I have heard that there are different ways in which I can declare rental income and that there are various depreciation options for rented properties. I wonder if I have considered all relevant tax aspects so far and if there are any unused tax benefits for me as a landlord.
My concerns are that due to ignorance, I may miss out on tax benefits and end up paying more taxes than necessary. Therefore, I would like to know from you how the rental of my properties affects my income tax and if there are ways for me as a landlord to save taxes or take advantage of tax benefits.
Could you please explain to me how I should correctly declare my rental income as a landlord and if there are opportunities for me to claim tax advantages? Thank you in advance for your help.
Sincerely,
Christian Meier
Dear Mr. Meier,
Thank you for your inquiry regarding the tax aspects of renting out your properties. As a tax advisor specializing in rental and leasing, I would be happy to assist you and provide you with a detailed response to your questions.
First and foremost, it is important to know that income from renting out properties must be reported in your income tax return. This rental income is subject to income tax and must be taxed accordingly. There are various ways in which you can correctly report rental income for tax purposes.
One of the key aspects of renting out properties is the depreciation allowances. As a landlord, you can depreciate the acquisition and production costs of your properties over a certain period for tax purposes. This is known as linear depreciation. Depreciation allows you to reduce your tax burden and save on taxes.
Furthermore, there are other tax benefits that you can take advantage of as a landlord. These include deductible expenses that you can claim in relation to the rental. These expenses may include costs for maintenance and repair of the properties, administrative expenses, property tax, and insurance premiums. These expenses can also help reduce your tax burden and utilize tax benefits.
It is important to consider all of these tax aspects when renting out your properties in order to not miss out on potential tax benefits. I am available to analyze your individual situation in more detail and provide you with specific tips on how you can save on taxes as a landlord.
I hope this information is helpful and addresses your questions. Please do not hesitate to reach out to me again if you have any further questions.
Best regards,
Johann Lauer
