Income from renting: what you can deduct

You must tax rental income, but you can also offset many costs. From interest to repairs to building depreciation, income-related expenses reduce your taxable income. Often even a tax loss arises, which reduces other income.

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Income from renting and leasing is taxable (§ 21 EStG). But you can deduct income-related expenses: interest on debt, maintenance expenses, administrative costs, insurance, property tax and building depreciation (AfA).

If the income-related expenses exceed the rental income, a tax loss arises that can be offset against other income and thus lowers your total tax.

What you should do now

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1. Record income
Record all rental income including apportioned ancillary costs.
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2. Collect income-related expenses
Collect receipts for interest, repairs, administration, insurance, property tax and travel costs.
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3. Claim depreciation
Claim the building depreciation (AfA), a certain percentage of the building acquisition costs each year.
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4. Enter in Annex V
Enter income and income-related expenses in Annex V. A loss reduces your other tax.

How to spot the scam

You only declare the income and forget the income-related expenses.
The building depreciation is not used.
Larger maintenance expenses are not optimally distributed.

Frequently asked questions

Do I have to tax rental income?

Yes, income from renting and leasing is taxable (§ 21 EStG). However, you can offset numerous income-related expenses, so the income actually to be taxed is often significantly lower or a loss arises.

What can I deduct?

Among other things, interest on debt for the financing, maintenance and repair costs, administrative costs, insurance, property tax, travel costs and the building depreciation (AfA). These income-related expenses reduce your taxable rental income.

What does a tax loss bring?

If the income-related expenses exceed the rental income, a loss from renting arises. This can be offset against other income (e.g. wages) and thus lowers your total income tax.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.