Is it possible to get a refund of value-added tax for self-renovation of a partially commercially used property?
December 11, 2012 | 25,00 EUR | answered by StB Steffen Becker
Hello,
I intend to buy a cheap, old house in Saxony in January 2013. I want to live in this house myself and also run a small guesthouse or possibly rent out a section of the house.
The house would need to be completely and extensively renovated, and I intend to do this to a large extent myself. I have the necessary expertise, but I am just a private individual. Of course, when the time comes, I will register the guesthouse as a business.
Now my question: Is there any way that I can get a refund on the VAT for purchased renovation materials (windows, doors, insulation materials, etc.) because it is largely intended for a planned business?
If so, what would I need to do for this?
I am not concerned about tax deductibility, as my income is currently below the tax-free allowance.
Kind regards,
Dear inquirer,
Thank you for your inquiry. I will answer this as part of an initial consultation based on the information provided by you. Missing or incorrect information can affect the legal outcome.
If you operate a guesthouse, you generate sales that are subject to value-added tax (§ 1 para. 1 UStG in conjunction with § 4 No. 12 sentence 2 UStG). If you do not apply the small business regulation (sales less than €17,500/year), you can claim the VAT on the costs related to the part that is subject to VAT rental as input tax with the tax office. You can either allocate the costs specifically or allocate them based on the area.
It is important that you are renting out living/sleeping rooms for the short-term accommodation of strangers. Another - long-term - rental for residential purposes is VAT-exempt according to § 4 No. 12.a) UStG, and the input tax cannot be claimed in this case! If and to what extent you use the property for taxable transactions, you can also claim the input tax.
You must also consider that there is a 10-year input tax adjustment period for properties. If there is a change in use during this period, an input tax correction must be made (partial repayment of input tax).
I hope I have been able to give you a brief overview of the tax situation. However, to provide a comprehensive and more specific statement, detailed information about your personal circumstances will definitely be required.
Best regards,
Steffen Becker
-Tax consultant-
stb-becker@arcor.de
