Tax considerations

At each year a tax result has to be calculated. Income is rent income and e.g. sales gains of property.

Costs are typically operating and administration expenses, depreciation and interest expenses.

Especially interest expenses are an issue you can safe many German taxes with. Under certain circumstances interest on a property mortgage are full deductable in Germany, no matter if paid to a bank or a private person. If for example the private person is non-resident in Germany, the interest income of this person will not become subject to German tax. There are very detailed tax rules on this interest matter.

Contact your specialist at Cosmotax to find the best solution for you.

Depreciation costs are acquisition costs for the building (not for land) that are for tax purposes spread over a certain amount of tax periods. This means depreciation lowers your taxable income although you did have no costs for this. There are very detailed tax rules on this depreciation matter.

Contact your specialist at Cosmotax to find the best solution for you.

You furthermore have the possibility to carry tax losses forward or backward. This means for example of you have a tax loss in year 2016, you can offset this lost from a tax gain you might have made in years 2015 or 2017.