Can I deduct the costs of renovation work from my taxes as a landlord?
January 11, 2024 | 50,00 EUR | answered by Lucas Krebs
Dear tax advisor,
My name is Felix Widmann and I have been renting out an apartment in Munich for several years. Recently, there have been some renovation works in the apartment, including the renewal of the bathroom tiles, painting the walls, and replacing the flooring. These renovation works have cost me a significant sum and now I am wondering if I can deduct these costs from my taxes.
I am concerned that I will be stuck with the costs at the end of the year and have no way to claim them for tax purposes. As a landlord, I not only have to pay taxes on the rental income, but also should consider the expenses. I am uncertain about whether and to what extent I can deduct the renovation costs.
Could you please help me and explain under what conditions I can deduct the renovation costs for tax purposes? Are there specific requirements that I need to meet for the costs to be recognized? And how exactly can I report the costs in my tax return to ensure that they are taken into account?
Thank you in advance for your support and advice.
Sincerely,
Felix Widmann
Dear Mr. Widmann,
Thank you for your inquiry regarding the tax deductibility of renovation costs when renting out an apartment. As a tax advisor specializing in rental properties, I am happy to assist you and provide you with all the information you need.
In general, renovation and maintenance costs for rented properties are tax deductible. This means that you can claim the expenses incurred for renewing bathroom tiles, painting walls, and replacing flooring in your tax return. However, this is only applicable if the renovation work is actually for the maintenance and preservation of the property.
To deduct renovation costs from your taxes, you must carefully keep the invoices and receipts for the work and include them in your tax return. It is important that the costs can clearly and unequivocally be attributed to the renovation work. Additionally, the work should be carried out by a professional to ensure that it meets the tax requirements.
When reporting renovation costs in your tax return, you should enter them under the operating expenses for rental income. You can either deduct the costs in full in the year of payment or spread them out over several years as capital-related maintenance costs. In any case, make sure that the costs are reasonable and documented.
In summary, you can deduct renovation costs for your rented apartment from taxes if they are for the maintenance and preservation of the property and can be proven. If you have any further questions or need assistance with the detailed calculation of costs, I am here to help.
I hope this information has been helpful to you. Feel free to reach out to me with any additional questions.
Best regards,
Lucas Krebs
