Anyone who owns or rents out a property can benefit from tax advantages in many areas. Targeted depreciation, subsidies and operating cost accounting can reduce the tax burden and make investments more profitable.
What costs can owners deduct for tax purposes?
Income-related expenses for landlords: Those who rent out their property can deduct many costs from their taxes - including interest for financing, renovation costs and management fees.Depreciation for buildings: Property owners can claim the loss in value of their property via the so-called depreciation for wear and tear (Absetzung für Abnutzung, AfA). The annual depreciation rate for residential buildings is generally 2 %, with higher rates for new buildings in some cases.Handyman services: Costs for renovation or modernization measures are tax-deductible. Some minor repairs can also be claimed as household-related services.Energy-related renovations: Anyone who modernizes their property to make it more energy efficient can take advantage of tax benefits in many cases. This includes, for example, insulation measures, replacing old heating systems or installing new windows.
Landlords benefit twice over
It is particularly worthwhile for landlords to keep an eye on all relevant expenses. Not only the running costs, but also major maintenance work can be offset against tax. It is important that all receipts are kept in order to claim the expenses correctly from the tax office.
Tax advantages when selling a property
Anyone selling their property should be aware of the speculation period. If the property is sold within ten years of purchase, speculation tax is payable on the profit - unless the property has been used by the owner in the last three years.
Conclusion
Property owners can save considerable amounts through targeted tax planning. From depreciation to subsidies, there are numerous ways to make property ownership even more economically attractive. Early advice and careful documentation of all relevant costs is worthwhile in order to optimize the tax burden.
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