Rental and leasing income (Germany)
Determination of income
Income from renting and leasing is determined by the excess of income over income- related expenses ( (2) No. 2 EStG). Rental and leasing income is excess income and not profit income . Income from renting and leasing is included
- paid transfer
- of assets
- of private wealth
- to other people
- for usage
Rental and leasing income
Rental and leasing income includes
- Income from renting and leasing immovable property , in particular land , buildings , parts of buildings, ships entered in a ship register, aircraft and rights that are subject to civil law regulations on land (e.g. heritable building rights , mineral extraction law );
- Income from renting and leasing items (the income from renting out an individual item of private property is to be assigned to other income in accordance with (1) No. 3 EStG).
- Income from the temporary granting of rights, in particular of literary, artistic and commercial copyrights , of commercial experience and of justice and favor;
- Income from the sale of rent and rent claims , even if the income is included in the sale price of land and the rent or lease interest relates to a period in which the seller was still the owner;
provided that this income is not already attributable to another type of income. Income is to be recorded for tax purposes in the year in which it accrued ( accrual principle, exception: regular recurring income).
An employee rents out a condominium belonging to him . The rental income including the allocation for ancillary costs is part of the rental and leasing income.
An entrepreneur runs a plumber on his own property and rents out a company apartment , which is part of the plumber's business assets. The rental income including ancillary costs is part of the income from commercial operations .
Advertising expenses for renting and leasing
The typical advertising costs for a rented apartment include
- the depreciation on the building ( tax depreciation )
- the ongoing operating costs , e.g. B. Expenses for the purchase of water, electricity or fuel (if these ancillary costs are passed on to the tenant, this allocation must be recorded as income)
- the property tax
- the depreciation on rented furnishings,
- the financing costs (interest on mortgage , mortgage , discounts , sales charge when Bausparvertrag ) in so far as the apartment in connection standing,
- the house money for a condominium (but without an addition to the maintenance reserve ),
- Maintenance and repair costs ,
- Costs for legal advice in connection with the tenancy,
- Costs of tax advice insofar as they relate to the determination of the rental and lease income,
- Insurance that affects the home (e.g. fire insurance , legal protection insurance , liability insurance ),
- Ground rent
- Administrative costs (office supplies, travel expenses to the rented property and owner meetings)
In principle, income-related expenses are to be deducted from the tax in the year in which they were paid out ( outflow principle, exception: regular recurring expenses).
If the rent received (basic rent plus the charges paid) for the provision of an apartment for residential purposes is less than 66% of the local comparative rent, the income- related expenses may also only be deducted with a correspondingly lower proportion.
The apartment is rented to a friend of the owner. The landlord therefore only charges 70% of the local comparative rent.
Consequence: 100% of the advertising expenses may be deducted to reduce taxes, because at least 66% of the local comparative rent is calculated. For example, if the rent claim would be 60% of the local comparable rent, only 60% of the advertising costs should be deducted.
Near acquisition costs
Near acquisition costs are expenses that can be incurred in the first three years after acquisition of the property. These are expenses that, conceptually, would initially have to be assigned to the maintenance or repair costs. However, if the expenses exceed 15% net of the acquisition costs , these expenses are added to the acquisition costs and increase the assessment basis for the depreciation of the building (the depreciation rate remains unchanged, however). If the expenses are not higher than 15%, they can be deducted in full as income-related expenses during the assessment period. An exception is what is known as a standard survey. A standard survey exists when three of four central characteristics of the property are being renovated (usually: heating, sanitary facilities, electrical systems and windows). In this case, the expenses again only increase the depreciation base. The 15% limit is ignored here.
In a building bought in 2004, the sanitary facilities are renewed in the same year. In 2005 the owner replaced the heating system, in the following year he replaced the windows with more modern, energy-saving windows. This means that three of the four central features will be renovated in the first three years after acquisition. The expenses therefore increase the acquisition costs and thus the depreciation regardless of their amount.
If the owner had waived one of the three measures and had his expenses in the first three years remained below 15% of the acquisition costs attributable to the building, the expenses would have been immediately deductible as business expenses.
However, costs for repair measures to remove material damage that can be proven to have only been caused by the culpable act of a third party after the building was acquired are not allocated to the near-acquisition production costs within the meaning of Section 6 (1) No. 1a sentence 1 EStG, even if the Measures are taken by the taxpayer within three years of purchase to restore the operational readiness of the building.
The legal basis is(1) No. 1a EStG.
value added tax
The rental and leasing of land is exempt from sales tax according to No. 12 UStG . The landlord can treat such sales as taxable if the rental to an entrepreneur is carried out for his company ( option ). The waiver of the VAT exemption is only permissible if the recipient of the service (tenant) uses the property exclusively for sales that do not exclude input tax deduction . It follows that z. B. When renting practice or office space to doctors, insurance companies, insurance agents, banks, etc., the VAT exemption cannot be waived. The same also applies to the rental of "commercial between tenants" (see. Below) provided these to individuals sublet because the interim tenants are not allowed in these cases to deduct. You are not tied to the option in terms of time, but the correction according to UStG must be observed, which applies to buildings according to Paragraph 1 Clause 2 UStG for 10 years; the input tax must be repaid for the remaining 10 years of a VAT-free rental.
VAT statement in the housing allowance (house allowance) statement
In principle, gross expenses are to be settled. If - as usual - a community has not waived the total tax exemption for its sales, the administrator may only show the gross expenditure amounts (including sales tax) in the accounts with the owners. If the amount of sales tax is also stated, this is considered a separate tax statement i. S. v.Paragraph 3 UStG; this would mean that the tax amount would have to be paid to the tax office. A separate tax statement in invoices should therefore be avoided if a house community has not waived the VAT exemption.
In tax investor models with an intermediary commercial intermediate or guaranteed tenant and authorization for final letting, it may be necessary to show sales tax in annual statements and also individual statements. The representation of proportionate sales tax on annual operating expenses may be advantageous for owners who rent out commercial property, specifically for their own input tax deduction options. Appropriate options by the owners themselves and also by the community are required, i. H. Waiver of tax exemption according to i. V. m. No. 13 UStG. Details on this topic, including any accounting and tax declaration obligations of the administrator.
In such builder models of an earlier conception with usually agreed commercial interim leasing, administrators were therefore required to show the respective sales tax for expenditure items in order to give owners the opportunity to deduct input tax. By law, however, m is here. E. An administrator is not obliged to prepare advance sales tax returns and annual sales tax returns for the community and to transfer payment amounts taking into account input tax offsets. An administrator is not a “tax advisor” to a community. This is certainly different in the case of a correspondingly contractually agreed obligation for special fees.
Sauren pointed out that with effect from May 1, 1992, the sales tax law was changed so that the rental of parking spaces is no longer generally tax-free. In his essay, he presents the new legal situation and examines the extent to which the tax authorities' views are consistent with it. Parking spaces that are jointly owned and rented separately may be subject to sales tax after the results have been determined; The administrator, as the representative of the community, then has to collect sales tax and ensure that the input tax is shown in the invoices; he must then himself (or through a tax advisor) prepare the annual VAT return for the community (including advance returns) and pay the taxes . Insofar as an apartment owner carries out a rental that is subject to VAT, he must opt for VAT in order to be able to apply input tax ( No. 13 UStG). A majority decision of the community is required for this. If an option has been made, it is then the responsibility of the administrator to show the sales tax amounts separately, because the administrator has to implement the decision on the option ( (1) No. 1 WEG ). For this purpose, he can use a tax advisor after a prior resolution.
- BFH , judgment of May 2, 2000, Az. IX R 71/96; Full text = BStBl II 2000, 467.
- BFH, judgment of August 25, 2009, Az. IX R 20/08; Full text ; Acquisition-related expenses within the meaning of (1) No. 1a EStG for repair and modernization measures that are to be recognized uniformly - definition: cosmetic repairs = full text .
- BFH, judgment of May 9, 2017 - IX R 6/16 -, BFHE 259, 42, BStBl II 2018, 9
- cf. A9.1 (3) UStAE
- BFH, judgment of May 18, 1988, Az. II R 238/81, full text = BStBl II p. 753; see. also WE 1989, 73 and 111 “The VAT option as a trap for administrators and owner associations”.
- cf. Deckert in PiG 1985, 154 ff .; Festschrift for Bärmann and Weitnauer; Jaser in Group 8; Merle, PiG 1986, 107.
- against Merle
- on the sales tax option in apartment owners' associations, cf. also OLG Hamm, judgment of May 12, 1992, Az. 15 W 33/92, Leitsatz = BB 1992, 1308.
- WE 1994, 261
- Art. 12 No. 2b StÄndG 1992, BStBl I 1992, 146.
- Sauren, BB 1986, 436.
- Merle, PiG 21, 115, Sauren, WEG § 28 note 5a p. 184.