Anlage V: German rental income for owners who live abroad

Because the building is there. German law taxes rent from property that lies in Germany whoever owns it and wherever they live. It is limited tax liability: Germany taxes the rent from that property and nothing else of yours, but it does tax it every year.

In the ordinary case, no. The law applies the tariff to your income increased by the allowance, which cancels it out, so tax begins at the first euro of rent you keep. Somebody living in Germany with the same flat would often pay nothing. You can apply to be treated as fully liable instead, but that needs at least 90 percent of your income to be taxable in Germany, or your other income to stay under the allowance, which rules out most people with a salary at home.

Depreciation of the building, interest on the loan that bought it, management, repairs, the Grundsteuer and the costs you pass on to the tenant. The limit for somebody living abroad is that a cost must be economically connected to the German property: your accountant at home, your travel to look at it, and your own mortgage on a different house do not qualify.

It follows the year the building was finished: 2 percent a year for 1925 to 2022, 2.5 percent for anything older, and 3 percent for buildings finished after 2022. New residential buildings begun between October 2023 and October 2029 can instead be written down by 5 percent of the falling book value. All of it applies to the building only, so the part of the purchase price that bought the land is never depreciated.

The one in whose district the property lies. Not the one where you used to live, and not a central office for foreigners. If you own two flats in different districts, the one with the more valuable property takes it.

31 July of the year after the tax year if you file it yourself. If a Steuerberater files for you, the deadline moves to the end of February of the year after that. The table on this page counts down to the next one.

For rental income you are not forced to file electronically, but almost everybody does, because ELSTER is free and the paper route from abroad is slow. Registering takes a letter with an activation code, which reaches a foreign address as well.

Germany does not tax a notional rent on an empty home, which is where it differs from Switzerland and from Spain. With no rent there is usually nothing to declare, though costs from a period when you were genuinely trying to let it can still be worth claiming. The Grundsteuer is due either way.

Germany has the first right to tax property that stands in Germany. Your own country then either exempts the German rent while still counting it when it sets your rate, or credits the German tax against its own. Which of the two applies depends on your treaty with Germany. Nothing you file in Germany replaces your return at home.