What tax aspects need to be considered when renting furnished apartments?
June 7, 2023 | 40,00 EUR | answered by Lorenzo Hartmann
Dear Tax Advisor,
My name is Babette Schaaf and I have been a proud owner of several furnished apartments that I rent out for a few years. So far, I have mainly taken care of the rental and maintenance of the apartments, but now I am uncertain about the tax aspects I need to consider when renting out furnished apartments.
I have declared the income from the rental of my furnished apartments in my income tax return, but I am not sure if I have done everything correctly. I am concerned that I may not be optimizing potential tax benefits or that I may have made errors that could lead to tax disadvantages.
Therefore, I would like to know from you what tax aspects I need to consider when renting out furnished apartments. Are there specific regulations for furnished apartments? What expenses can I claim for tax purposes and how can I optimize my tax burden? Are there any special considerations I need to keep in mind when filing my tax return?
It would be very helpful for me if you could provide me with specific tips and guidance so that I can fulfill my tax obligations correctly and make the most of potential tax benefits.
Thank you in advance for your assistance.
Sincerely,
Babette Schaaf
Dear Mrs. Schaaf,
Thank you for your inquiry regarding the tax aspects of renting furnished apartments. It is understandable that you feel unsure and want to make sure that you are taking advantage of all tax benefits and not making any mistakes that could lead to tax disadvantages.
When renting furnished apartments, the same tax regulations generally apply as when renting unfurnished apartments. However, there are some specific aspects that you need to consider.
First of all, it is important that you declare the income from renting your furnished apartments in your income tax return. You should also take into account the deductible expenses. Advertising costs include maintenance costs of the apartments, property tax, insurance, repairs, management costs, as well as depreciation on the furniture in the furnished apartments.
A particularity when renting furnished apartments is that you cannot deduct the costs of acquiring and furnishing the apartments as operating expenses in full immediately. Instead, you must depreciate the acquisition costs of the furniture and equipment over the useful life. This is called linear depreciation.
Furthermore, there is the possibility to claim the value-added tax on rental income if you are a taxable landlord. Under certain conditions, this can lead to tax savings.
To optimize your tax burden, you should carefully document all relevant expenses and collect receipts. It may also be advisable to consult a tax advisor to ensure that you fully exploit all tax possibilities.
In conclusion, I advise you to be thorough when preparing your tax return and make all relevant disclosures correctly to avoid possible tax disadvantages.
I hope this information helps you and I am at your disposal if you have any further questions.
Sincerely,
Lorenzo Hartmann
