Tax Returns for Homeowners. Everything in One Place.
As a homeowner, you have more tax options than most people realize. taxtastic walks you through all of them—whether you live in the home yourself or rent it out.
Whether it’s your own home or a rental property—the rules are different
What you can deduct depends on how you use your property. taxtastic asks for the relevant information for both scenarios.
Owner-occupied home
For your own home, there are tax deductions under Section 35a of the German Income Tax Act (EStG): Tradespeople’s services, household-related services, and energy-efficiency renovation measures can be deducted directly from your taxes—up to €5,200 per year.
Rental Property
When renting out a property, everything is reported as income-related expenses in Schedule V. Loan interest, depreciation, repairs, management fees, and property tax—all of these reduce your taxable rental income. This often even results in a tax loss, which lowers your other income.
Owner-occupied and rented out?
If you rent out a granny flat or the upper floor of a house—both sets of rules apply at the same time. taxtastic allocates the costs proportionally and enters everything correctly.
What You Can Deduct for Your Home
If you hire contractors for your own home, employ a housekeeper, or make energy-efficiency upgrades, you can deduct a portion of the costs directly from your taxes. taxtastic helps you report everything correctly.
for contractor services/year
for household-related services per year
directly from your taxes
Rental property: These expenses lower your taxes
Landlords enter everything in Schedule V. taxtastic fills it out automatically—you just answer questions, no form-filling hassle.
Building Depreciation (AfA)
You claim depreciation on the building for tax purposes every year—not the land, just the building. The rate depends on the year of construction:
- Older buildings (built before December 31, 1924): 2.5% over 40 years
- Existing buildings (1925–2022): 2% over 50 years
- New construction (as of Jan. 1, 2023, straight-line): 3% over 33 years
- New construction (construction started Oct. 1, 2023–Sept. 30, 2029, declining balance): 5% of the residual value—significantly higher depreciation in the first few years
taxtastic automatically calculates the correct amount based on the year of construction and purchase price.
Loan Interest
The interest on your mortgage is fully deductible as income-related expenses—as long as the property is rented out. Principal payments are not included.
Maintenance and Repairs
Repairs and maintenance costs are directly deductible. Smaller purchases up to €800 net are deductible immediately; larger ones are spread over the property’s useful life. Larger renovation costs can be spread over up to 5 years.
Utilities & Management
All utility costs not passed on to the tenant are deductible: property tax, building insurance, property management fees, account maintenance fees, advertising costs for finding tenants, and travel expenses to the property.
Special Depreciation for New Construction (Section 7b of the Income Tax Act)
For new rental apartments with a building permit application filed between January 1, 2023, and September 30, 2029, there is an additional 5% special depreciation per year for 4 years. It does not matter when the apartment is completed—what counts is the date of the building permit application.
The conditions are strict: The building must meet the “Effizienzhaus 40” standard with a sustainability class and receive a quality seal for this, which is awarded only after completion. Construction costs may not exceed €5,200 per square meter—if they do, the subsidy is forfeited entirely. The maximum subsidy is €4,000 per square meter.
And the apartment must remain rented for ten years. Otherwise, the special depreciation deduction will be revoked—even if your tax assessment has long since become final.
Prepaid Income-Related Expenses
You can still deduct costs incurred before the apartment is first rented out—such as classified ads, real estate agent fees, and renovations before the first tenant moves in—as long as the intention to rent it out is clear.
Homeownership: Three Benefits Many People Don’t Know About
Under Section 35a of the German Income Tax Act (EStG), you can deduct payroll costs directly from your tax liability—not just from your income. That makes a real difference.
Tradespeople’s services
20% of labor costs—up to €1,200 in tax relief per year. This applies to work done on your owner-occupied home: renovations, heating system maintenance, roofing work, and landscaping. Note: Only the labor portion counts; material costs do not. Important: Payment must be made by bank transfer; no cash payments.
Household-Related Services
20% of the costs—up to €4,000 in tax relief per year. Cleaning services, yard care, snow removal, and personal care services. The same rules apply here: only in your own household, only the labor portion, and only via bank transfer.
Energy-Efficiency Renovations (§35c EStG)
For owner-occupied residential property: 20% of the costs over 3 years, up to €40,000 per property. This applies to new heating systems, insulation, window replacement, and ventilation systems—provided an energy efficiency expert certifies the work and the building is more than 10 years old.
Important: For owner-occupied properties only
These three tax deductions (Section 35a and Section 35c of the Income Tax Act) apply exclusively to owner-occupied residential property. Anyone who performs the same work on a rental property should report the costs as income-related expenses in Schedule V—this is a different tax approach, but it is also effective.
Rental and Sales Tax
For most private landlords, renting out property is exempt from sales tax. In certain cases, however, opting to charge sales tax is worthwhile—taxtastic supports both options.
Residential Property: Generally Exempt from Value-Added Tax
The rental of residential property is exempt from sales tax under §4 No. 12 UStG. This means: no sales tax on the rent, but also no input tax deduction on your expenses. For most private landlords, this is the standard scenario.
Commercial Space: Option to Opt for Sales Tax (Section 9 of the German Sales Tax Act (UStG))
If you rent commercial space to a business owner who is eligible for input tax credits, you can opt for sales tax. Advantage: You can claim input tax credits on construction and renovation costs. This option is particularly worthwhile for large investments. taxtastic guides you through the decision-making process and the sales tax return.
When is opting for sales tax worthwhile?
Mainly when you’ve incurred high investment or renovation costs and the input tax deduction from these provides you with a real liquidity advantage. Prerequisite: The tenant is a business owner and uses the space exclusively for transactions eligible for input tax deduction. For residential space, this option is generally not available.
Here’s how it works with taxtastic
No forms, no technical jargon—just questions you can answer.
Specify the property & its use
Owner-occupied, rented out, or both? taxtastic automatically determines which tax rules apply to you and which fields you need to fill out.
Enter income & expenses
Rental income, loan terms, repair invoices, depreciation-related data—taxtastic collects all the information, calculates automatically, and categorizes it correctly.
Submit via ELSTER
Schedule V, Schedule V-FeWo, VAT return—everything is automatically filled out, verified, and securely transmitted to the tax office.
A Real-World Example
A realistic example: a primary residence plus a rented condominium.
- Depreciation on rental condo (built in 2001, 2%): €3,200; income-related expenses
- Loan interest on rental property: €2,800 in income-related expenses
- Maintenance of rental apartment: €1,500 in income-related expenses
- Home improvement services (§35a): €1,200 deducted directly from taxes
- Household-related services for owner-occupied home (§35a): €480 directly deductible from taxes
For which homeowners?
taxtastic supports many typical scenarios—from your first rental apartment to a multi-family home.
What taxtastic Does for You
Schedule V automatically
A separate Schedule V for each rented unit—taxtastic fills out and submits everything correctly, no matter how many properties you have.
Automatic Depreciation Calculation
Enter the year of construction; taxtastic handles the rest: straight-line or declining-balance depreciation rate, allocation of purchase price between land and building, remaining useful life—all calculated according to current regulations.
VAT return included
Whether you’ve opted for sales tax or operate a vacation rental subject to sales tax: taxtastic also prepares the sales tax return and advance filings.
Validation Check
Before you submit, taxtastic checks your entries for common errors—excessive income-related expenses, missing required information, incorrect allocation of costs.
Automatic tax tips
taxtastic alerts you to opportunities you may not have considered: special depreciation, allocable maintenance expenses, and overlooked income-related expenses.
ELSTER Submission
Schedule V, Schedule V-Vacation Rental, Schedule V-Other—everything is transmitted securely and directly to the tax office.
Frequently Asked Questions
Do I always have to report rental income on my taxes?
Yes, rental income is considered income from renting and leasing under Section 21 of the Income Tax Act (EStG) and must be reported on your tax return. The only exception: Occasional sublets with income under €520 per year may remain tax-free. You can deduct your income-related expenses from your rental income—often leaving little or no taxable income.
How does depreciation (AfA) work for rental properties?
The building (not the land!) is depreciated annually as income-related expenses. The rate depends on the year of construction: buildings completed by December 31, 1924, at 2.5%; buildings from 1925 to 2022 at 2%; new buildings from 2023 onward at 3% on a straight-line basis. For new buildings where construction began between October 1, 2023, and September 30, 2029, there is also a declining-balance depreciation of 5% of the residual value—which results in significantly higher depreciation in the early years. The tax base is always the acquisition cost, excluding the land portion.
What can I deduct for an owner-occupied property?
For owner-occupied residential property, tax deductions are available under Sections 35a and 35c of the German Income Tax Act (EStG): Tradespeople’s services up to €1,200 per year, household-related services up to €4,000 per year, and for energy-efficiency renovations, up to €40,000 per property over 3 years. Important: The deduction is applied directly to your tax liability—it is not depreciation, but a tax reduction. Loan interest and depreciation are not deductible for owner-occupied properties.
I rent out a vacation home—what do I need to keep in mind?
Vacation rentals are generally treated the same as regular rentals—Schedule V plus the additional Schedule V-FeWo. For the tax office to recognize your income-related expenses, there must be a clear intent to make a profit: The apartment must be rented out most of the time and may not be used primarily for private purposes. Platforms like Airbnb or Booking.com have been automatically reporting your income to the tax office since 2023. taxtastic automatically fills out all the necessary forms.
Are utility costs deductible when renting out a property?
Yes—but only the utility costs that you pay yourself and do not pass on to the tenant. You must report the utility costs paid by the tenant as income and simultaneously deduct them as expenses—they cancel each other out. Costs that cannot be passed on to the tenant, such as property management fees, maintenance reserves (if spent), account fees, and insurance, are deductible as income-related expenses.
What about property tax—is it deductible or not?
If you’re renting out the property, yes: Property tax is deductible as business-related expenses in Schedule V. Unfortunately, property tax is not deductible if you live in the property yourself.
I rent to family members at a reduced rate—what are the rules?
Renting to family members at a reduced rate is permissible for tax purposes, but with one important limitation: If the rent is less than 50% of the local market rent, income-related expenses are only recognized on a pro-rata basis. If the rent is between 50% and 66% of the local market rent, additional requirements must be met. If it is above 66%, all income-related expenses are fully deductible. taxtastic retrieves the rental terms and calculates them correctly.
Do I need a separate Schedule V for each apartment?
Yes—generally, one Schedule V per rented property (land or condominium). A multi-family home counts as a single property. Individual apartments within a shared apartment, however, are recorded separately. taxtastic automatically creates a separate Schedule V for each property.
How much does taxtastic cost?
You can try taxtastic completely free of charge—you don’t pay until you file your tax return.
For employees, civil servants, retirees — and all homeowners and apartment owners
- Income tax return, including Schedule V
- Automatic depreciation calculation
- Schedule V—Vacation Rental
- Validation check
- One price—even for married couples
- Previous years: 4 for voluntary filings, up to 7 for mandatory filings
For anyone with business income, sales tax, or complex rental arrangements
- All features of the BASIS plan
- Trade tax return
- Value-Added Tax Return
- Value-Added Tax (VAT) Estimated Return
- VAT option for commercial property rentals
- Automatic EÜR (simplified accounting) including depreciation, IAB, and reserves
Find out in under 1 minute how much you’ll get back!
Our free quick check gives you an initial, non-binding estimate in just a few steps—no registration required.
What is your marital status?
Determines your tax filing status and tax rate.
Your rental income and other income
Rental income is taxed together with other income.
Deductible expenses from rental income
These expenses reduce your taxable rental income.
Building Depreciation (AfA)
Depreciation: 2% of the building’s value per year (new construction starting in 2023: 3%).
Advance payments made
The tax office may assess income tax prepayments on rental income.