What do I need to consider when declaring rental income in my tax return?
January 2, 2024 | 30,00 EUR | answered by Wolfgang Lenzner
Dear tax advisor,
my name is Hilde Brandes and I have a question regarding the declaration of rental income in my tax return. In the past, I have rented out a condominium and now want to make sure that I provide all relevant information correctly to avoid any issues with the tax authorities.
Currently, I am in an uncertain situation as I am not exactly sure how to correctly declare the rental income. I have heard that there are different ways to do so, such as reporting the income from renting and leasing in Annex V or Annex V+V. Additionally, I am unsure about which expenses I can claim and how best to prove them.
I am worried that I might make a mistake and in the worst case scenario, have to face additional payments or fines. Therefore, it would be very helpful if you could explain to me exactly what I need to consider when declaring rental income in the tax return. Are there specific deadlines I need to meet? What evidence and documents should I have ready? Are there ways to optimize my tax burden?
I would greatly appreciate your support and professional advice on this matter. Thank you in advance.
Best regards,
Hilde Brandes
Dear Mrs. Brandes,
Thank you for your question regarding the declaration of rental income in your tax return. It is understandable that you may feel uncertain and want to ensure that you are providing all the correct information to avoid any issues with the tax office.
First of all, it is important to know that the income from renting and leasing should be declared in the attachment V of your tax return. In this attachment, you must provide all relevant information about your rental income, including the amount of income and associated costs. If you have additional income from renting and leasing besides renting out your condominium, it can be declared in attachment V+V.
Regarding the deductible expenses that you can claim, you should consider all expenses related to the rental of your condominium. This includes costs for repairs, maintenance, property tax, insurance, management fees, loan interest, as well as depreciation on the building and furnishings. These expenses can reduce your tax burden and should therefore be included in your tax return.
To be able to prove the deductible expenses, I recommend keeping all relevant receipts and documents safe. These may include invoices, bank statements, rental agreements, receipts, and documents for maintenance and repair work. These documents can serve as evidence for the claimed deductible expenses in case of a request from the tax office.
In terms of deadlines, it is important to know that the tax return for the respective tax year must be submitted to the tax office by July 31 of the following year. However, it is possible to request an extension if you need more time.
To optimize your tax burden, I recommend carefully recording and declaring all relevant deductible expenses. Additionally, you should check if you may benefit from tax depreciation options such as linear or declining depreciation. In some cases, it may also be beneficial to create an income-expenditure statement to transparently present your income from renting and leasing.
I hope that this information has been helpful to you and I am happy to assist you with any further questions. Please do not hesitate to contact me if you need further support.
Best regards,
Wolfgang Lenzner
