Real estate tax advice
Whether you've purchased real estate for private use, live in it yourself, offer it for long- or short-term rental or use it in your business there are a wide range of special tax rules that apply to income and transactions surrounding real estate property. With our expertise in this special field, we help you maintain a clear overview of the complex tax implications and support you with acquisition and sales processes, ongoing consulting, or setting up structures for long-term wealth building.
What kind of income do I generate with my real estate property and how is it taxed?
The taxation of income from your real estate property depends on various factors, such as what exactly you rent out (garage, parking space, entire apartment, office space, etc.), the legal form in which you do so, and the type of ownership of the property (i.e. held privately or as a business asset). It’s also possible to rent out a real estate property without being the direct owner (e.g., arbitrage model with a vacation rental).
Generally, you either generate income from private asset management under § 21 EStG or commercial income under § 15 EStG. The classification has a wide range of tax impacts on e.g. ongoing income, sale proceeds and VAT.
We’re happy to advise you on how to classify your income.
Are there any special tax rules regarding short term rental of vacation homes (e.g. Airbnb)?
There are a wide range of tax rules regarding rental properties in general but even more so for short term rental properties which range from income tax, corporate tax, trade tax, VAT, real estate transfer tax, etc.
Especially in the case of short term vacation rental, it is crucial to understand the exact nature of the rental business and the ownership structure of the property. Even a property owned privately can be considered as a business for tax purposes (i.e. income according to §15 EStG) which is required to pay trade taxes (in contrast to a rental property which only generates income under private asset management for tax purposes according to §21 EStG). And even though your short term vacation rental does not provide any food or other major amenities, providing WiFi to your guest should require you to split your invoice between the mere rental of the property (7% VAT) and the provided internet (19% VAT) and make the correct VAT payments to the tax authorities.
With our expertise in this specific field, we can assist you to navigate the complex network of rules and regulations.