After immigrating to Germany, what real estate-related expenses can be deducted?

First of all, owners need to understand the difference between total rental income and taxable rental income, because the basis for taxation is taxable rental income, not total rental income. Gross rental income is the rental income that the landlord receives from the tenant including water and heating expenses, and taxable rental income is the total rental income minus all tax-deductible expenses.

What expenses are tax deductible?

Interest charges: If an owner purchases a rental property with a loan, the full amount of interest charges paid to the bank each year can be deducted from the rental income.

Building depreciation expenses: Generally, the depreciation life of a building is set to 50 years, and the annual depreciation rate is 2%. For buildings built before 1925, the annual depreciation rate is 2.5%. The basis for calculating depreciation is the purchase price of the building, excluding the price of the land.

General building maintenance and renovation expenses: Depending on the amount and nature of the expenses, many expenses can be fully deducted for the current year. Some large repair and renovation costs are included in the purchase cost and depreciated at a rate of 2%.

Maintenance costs for cultural relics buildings: 9% depreciation per year for the first 8 years, and 7% depreciation per year from the 9th to 12th year.

Other real estate tax deduction expenses:

Gasline expenses: Gas expenses related to the rental of real estate and matters related to rental housing.

Bank account opening fee: the cost of opening a bank account to collect rent

Office supplies and telephone charges: consumption of office supplies and telephone charges related to property rental

Property management fee: the management fee charged by the property management company

Agency fee: the agency fee paid for renting the property

Plumbing fee: the water and heating expenses of the rental house

Attorney fees: attorney fees arising from legal disputes over renting a house

Membership fees: dues for joining the homeowners association

Compensation fees: if the landlord needs to make financial compensation to the tenant Expenses

Advertising fees: expenses incurred for publishing rental advertisements