Tax Return for Homeowners.
Get What You’re Entitled To.

Yes, rental income is considered income from renting and leasing under Section 21 of the German 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 business expenses from your rental income—often leaving little or no taxable income.

The building (not the land!) is depreciated annually as business 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 rate 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.

For owner-occupied residential property, there are tax deductions under Sections 35a and 35c of the Income Tax Act (EStG): Savings of up to €1,200 per year for contractor services, up to €4,000 per year for household-related services, and up to €40,000 per property over 3 years for energy-efficiency renovations. Important: These benefits allow you to deduct labor costs directly from your taxes—not depreciation, but a genuine tax reduction. Loan interest and depreciation are not deductible for owner-occupied properties.

Vacation rentals are generally treated like regular rentals—Annex V plus the additional Annex V-FeWo. For the tax office to recognize your business 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.

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, at the same time, 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.

For rental properties, yes: Property tax is deductible as business-related expenses in Schedule V. For owner-occupied residential property, unfortunately, property tax is not deductible.

Renting to family members at a reduced rate is tax-deductible, but with one important limitation: If the rent is less than 50% of the local market rate, 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’s above 66%, all income-related expenses are fully deductible. taxtastic retrieves the rental terms and calculates them correctly.

Yes—generally, one Schedule V per rented property (land or condominium). A multi-family house counts as one property. Individual apartments within a shared apartment, however, are recorded separately. taxtastic automatically creates a separate Schedule V for each property.