Ask a tax advisor on the topic of Tax return

Tax savings on rented new construction property.

March 21, 2012 | 25,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

What tax benefits can I claim when purchasing and financing 100% of a newly built rental property? I am a cross-border commuter working in Switzerland and residing in Germany.

Dipl.BW/SB Ulrich Stiller

Dear seeker of advice,

Thank you for your inquiry, which I would like to answer based on your information and in the context of your efforts within a first consultation as follows:

In answering your question, I assume that the new building property will be in your personal assets.

If you intend to rent out the property and actually do so after acquisition, you will generate rental income in accordance with § 21 EStG. You can then deduct the expenses related to the rental as advertising costs.

Advertising costs that can be deducted include (not an exhaustive list):

- Interest and financing costs of the property (excluding loan repayment).

- Depreciation on the building.

- Ancillary costs not to be borne by the tenant.

- House insurance, property tax, maintenance costs, unless borne by the tenant.

- Property management costs.

The advertising costs are listed on page 2 of attachment V.

The difference between the income and advertising costs is either positive or negative and will be considered in the income tax assessment.

I hope my explanations were helpful to you.

Best regards,

Ulrich Stiller
Tax consultant / Graduate in Business Administration