---

Tax treatment of subsidized rental

The landlord's deduction of expenses for a reduced-rate lease for income tax purposes

from
Lucas Bell
Lawyer
Specialist tax lawyer

Give me a call: 0261 - 404 99 761
E-Mail:

It is not uncommon for friends and relatives to rent apartments. Because you don't want to be a monster, you usually don't ask for the full rent. As the landlord, you still want the costs to be reimbursed. There are a few things to keep in mind here.

The full deduction is only possible if the agreed rent is at least 50% of the local market rent. If the rent is below this threshold, there is no complete exclusion, but only a portion of the costs will be recognized. This portion is based on the ratio of the agreed rent to the local market rent.

But what is the local market rent based on?

The local rent index provides a comparative value for apartments of the same type, location and size. The determination of this is based primarily on the local rent index. If there is no such index, either a rent database, an expert opinion or comparable apartments can be used.

If you decide to name comparative apartments, this must be done by stating the size and address of the apartments. In addition, at least three apartments must be named. Two or even one apartment is not enough.

The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.