The tax benefits for property owners can be complex. If you are not familiar with it as an owner-occupier or landlord, one question can keep you busy for a while: Saving taxes with real estate - how does that work? In our previous blog post we have brought a little light into the darkness for landlords. Now follows a small selection of the most important tax aspects for owner-occupiers.

Part 2: Tax aspects for owner-occupiers

Modernizations and repairs

The deduction of modernization and repair costs is one way to save taxes as an owner-occupier. If you live in an apartment or house yourself, you can claim all repairs or modernizations as income-related expenses for tax purposes.

So saving taxes with real estate is not difficult here. Nevertheless, there are some prerequisites that must be observed when proving modernizations and repairs. In order to be able to use the advantage, the owner-occupier of the property must place the order as a private individual with craftsmen or other companies. It is also important that the measure is carried out by a skilled craftsman. Should the owner renovate independently, he cannot claim the costs. In addition, an invoice for labor and material costs must be submitted. These must be listed separately, because the material costs are not deductible. The invoice must be paid by bank transfer. Cash payment is not possible here.

If the apartment is owned by a married couple, only one of the two partners can be charged for the costs. If necessary, the costs are divided equally between the two.

For measures within the framework of the entire homeowners' association, the owner can have his share certified by the administration and thus also deduct it from tax.

Household services such as B. the cleaning work of the cleaning lady or the lawn mowing of the gardener are among the deductible costs.

Depreciation of monuments for own use

Not only capital investors can deduct the costs for the renovation or restoration of monuments for tax purposes. Buyers of such a property can also benefit from the high monument protection depreciation if they use it themselves (§ 10f EStG).

These are similar to those for investors. Over a period of ten years, 90% of the renovation costs can be claimed against income tax as depreciation for owner-occupiers. In addition to monuments, this regulation also applies to buildings in redevelopment areas and urban development areas. According to this law, it is possible to deduct expenses for construction measures and maintenance expenses incurred in your own building. The owner can claim 9% in the calendar year in which the work is completed and in the following nine years

It is important to note that this only applies if the taxpayer uses the monument property for their own residential purposes in the respective calendar year. This requirement is also met if parts of the residential unit you live in are left to others free of charge (e.g. your own children).

Baukindergeld

The so-called Baukindergeld is a subsidy for the construction or purchase of a property. Owners can benefit from up to 12.000 euros per child. This amount will be paid in installments of 1200 euros per year over ten years.

Every family with children is entitled, but so are single parents. The condition is that the household income is a maximum of 90.000 euros for one child, plus 15.000 euros for each additional child. The property must be used for your own living purposes and may not be rented out. In addition, the new home must be the applicant's only residential property at the time of purchase (or when planning permission is granted). Children must be under the age of 18 and owners must collect child support for them.

It is possible to apply for this grant online. For example about the KFW funding.

In general, the application must be made within six months of the owners and their children moving into the property. All household members must be registered at the residential address of the house at this time. If you buy a property in which you already live, the day of signing the purchase contract is considered the beginning of the 6-month period.

Up to now, the building permit, the earliest possible start of construction or the purchase contract had to be dated December 31.12.2020, 31.03.2021 at the latest for the support with Baukindergeld. However, this deadline has now been extended to March XNUMX, XNUMX.

Save taxes with real estate: The sale

Tax-free sales of a property are possible for both investors and owner-occupiers, provided the framework conditions are observed. The most important thing to note here is the deadlines.

The following applies to owner-occupiers:
If the personal use is fulfilled in the year of the sale and the two previous years (i.e. three years before the sale), the sales proceeds can be exempted from taxation. The total duration can also be less than 36 months in this period. However, it must have been continuous.

"Use for own residential purposes" also includes that a child of the owner fulfills this condition. In this case, there must be an entitlement to child benefit (for the entire period of use) for this child or proof of a child allowance. In addition, the living space must be provided to the child free of charge. If these conditions are met, you can also save taxes here with owner-occupied real estate.