What tax aspects do I need to consider when I use my property for commercial purposes and rent it out partially?
July 30, 2022 | 40,00 EUR | answered by Lucas Krebs
Dear tax advisor for rental/leasing,
I am Marie Jensen and I own a property that I use for commercial purposes and partially rent out. In the past, I mainly used the property for my own business purposes, but recently I have also been renting out part of the premises to other companies. Now I am faced with the question of what tax aspects I need to consider in order to avoid any problems with the tax office.
So, my current situation is that I own a property that is both used commercially by myself and partially rented out. I am unsure of how to correctly declare the rental income and whether there are any special regulations to consider, as it is a mixed-use property.
My main concern is that I may be making tax errors and could face back payments or penalties from the tax office. I would like to ensure that I comply with all relevant tax laws and minimize my tax burden as much as possible.
Therefore, my specific question to you is: What tax aspects do I need to consider when using my property for commercial purposes and partially renting it out? Are there any special regulations or tax reliefs that I can take advantage of? How can I ensure that I do not make any tax errors and optimize my tax burden?
Thank you in advance for your professional advice.
Kind regards,
Marie Jensen
Dear Mrs. Jensen,
Thank you for your inquiry regarding the tax aspects of the commercial use and partial rental of your property. As a tax advisor specializing in rental/leasing, I can assist you and explain the relevant points to you.
First of all, it is important to know that the income from renting out your property is generally to be taxed as income from rental and leasing (§ 21 EStG). It does not matter whether it is commercial or private rental. However, since you mentioned that the property is also commercially used by you, it is considered a mixed-use property. In this case, you need to allocate the income and expenses accordingly and consider both the commercial use and the rental for tax purposes.
For the rental of part of the property, you can claim deductible expenses such as maintenance costs, management fees, depreciation, and financing costs to reduce your income. It is important that you keep all relevant receipts and documents carefully to be able to prove in case of an audit by the tax office that the expenses incurred are genuine.
Furthermore, there are certain regulations and tax reliefs that you can take advantage of to optimize your tax burden. Under certain conditions, special depreciation or the declining building depreciation (AfA) can be claimed for rented properties. You may also be able to invoice the VAT for the rental, if you can claim the input tax.
To ensure that you do not make any tax mistakes and optimize your tax burden, I recommend consulting a tax advisor specializing in rental and leasing. An expert can provide individual advice, analyze your tax situation, and help you take advantage of all relevant possibilities to minimize your tax burden.
I hope that this information was helpful to you. If you have any further questions or require a more detailed consultation, I am at your disposal.
Best regards,
Lucas Krebs, Tax Advisor
