What tax regulations apply to the rental of furnished apartments?
February 17, 2023 | 40,00 EUR | answered by Johann Lauer
Dear tax advisor,
My name is Georg Kaiser and I have been operating the rental of furnished apartments for some time now. So far, everything has been running quite smoothly, however, I now have concerns regarding the tax regulations that apply to this type of rental.
In the current situation: I rent out several furnished apartments to different tenants and generate regular income from it. I have declared the rental income so far as income from renting and leasing in my tax return. However, I am unsure if I have taken into account all the tax aspects correctly and if there may be specific regulations for furnished rentals.
My concerns are that I may have to make tax payments if I have done something wrong, or that I am not taking full advantage of tax benefits. I also want to ensure that I provide all relevant tax information correctly to avoid any problems with the tax office.
Therefore, my question to you is: What are the specific tax regulations that apply to the rental of furnished apartments? Are there special things I need to consider or tax benefits that I can take advantage of? I want to make sure that I handle all tax matters correctly and efficiently.
Thank you in advance for your help and advice.
Kind regards,
Georg Kaiser
Dear Mr. Kaiser,
Thank you for your inquiry regarding the tax regulations for the rental of furnished apartments. As a tax advisor specializing in rental and leasing, I am happy to assist you and provide you with relevant information.
In general, the same tax regulations apply to the rental of furnished apartments as to the rental of unfurnished apartments. Rental income is reported as income from rental and leasing in the tax return. You can deduct all advertising costs related to the rental, which can reduce your tax burden.
Advertising costs include depreciation on furniture and furnishings, proportional property tax, building insurance, maintenance costs, management costs, and interest on loans used to finance the properties. These costs can be deducted from rental income, thereby reducing your tax liability.
There are some specifics to consider when renting furnished apartments. You can claim depreciation on furniture and furnishings, usually over a shorter period than the property itself. It is important to document all income and expenses accurately to be prepared for any inquiries from the tax office.
There are also tax benefits you can take advantage of, such as the possibility of input tax deduction for purchases for the rented apartments or the ability to deduct renovation and modernization costs for tax purposes.
To ensure that you are optimizing all tax aspects and not missing out on any tax benefits, I recommend contacting a tax advisor. They can provide you with individual advice and help you manage your tax affairs correctly and efficiently.
I hope this information has been helpful to you. If you have any further questions or need assistance, please feel free to contact me.
Sincerely,
Johann Lauer
Tax Advisor
