Regardless of whether you are an investor or owner-occupier: As an owner, you have a wide variety of options for saving taxes with real estate. This week we will introduce you to some tax aspects that can be relevant for real estate buyers and owners. Which costs can be deducted? Which conditions apply? What to look out for In the first part of our article, we focus on the tax advantages for landlords. But even as an owner-occupier there are opportunities that should not be missed. We will address that in our next blog post.

Part 1: Tax aspects for landlords

maintenance expenses

Maintenance expenses are a great way for landlords to save on real estate taxes. If the apartment is rented out by the owner, he can e.g. B. deduct the costs for maintenance, repairs or renewals as maintenance expenses from the tax. This includes all repair costs that serve to keep the property in good condition.

Up to 15% of the building value (not the land value) can be deducted in five years. If only the total price of the building and land is known, this must be divided up. Ideally, a separation should already take place during the listing in the purchase contract.
In the case of maintenance expenses, it is not relevant whether the measures were necessary or how high the costs are. The maintenance costs can usually be deducted directly as income-related expenses.

Examples of maintenance expenses include replacing windows and doors, replacing the heating system, installing new tiles in the bathroom or replacing the roof.

Monument depreciation and redevelopment area

In Germany, the protection of monuments and the preservation of historical buildings are of great importance. In order to create incentives for the preservation and modernization of monuments, a promotion of depreciation options was created. The depreciation of monument depreciation stands for deduction for wear and tear and is one of these tax advantages.

In general, this aspect includes tax incentives for monuments or buildings in redevelopment areas and urban development areas. In the context of the depreciation of monuments, there are above all preferential treatment for production and acquisition costs for certain modernization measures.

This applies to:

inland buildings in a formally designated redevelopment area or urban development area (§ 7h EStG)
architectural monuments (§ 7i EStG)

In order to be able to save taxes on real estate with the regulations just mentioned, one must note that the building or monument concerned must serve to generate income. However, this does not apply to new construction and reconstruction of real estate.

Save on taxes when selling real estate

Both investors and owner-occupiers can benefit from tax-free sales of their property. Only the general conditions differ here.

If there are at least ten years between the purchase and sale of a property, the proceeds from the sale are exempt from taxation.
This ten-year period was introduced by the tax authorities as a benchmark for assessing whether speculative purchases exist and whether a so-called speculation tax should therefore be levied.

The deadline is less strict if the apartment or house is used for personal living purposes. You can find out what that means and what other tax advantages owner-occupiers should not miss out on in our next blog post "Save taxes with real estate - Part 2: Tax aspects for owner-occupiers".