
Save taxes with real estate: Investors benefit from these advantages
Depreciation & expenses: How real estate reduces your tax burden
A major advantage of buying real estate is the depreciation that you can claim for tax purposes. Buildings have a useful life, and their loss in value is taken into account for tax purposes. This means that you can deduct part of the acquisition costs from your taxes each year as depreciation. In addition to depreciation, other expenses such as repair, renovation, and maintenance costs reduce your tax burden.
In many cases, loan interest, property tax, and real estate agent commissions are also tax-deductible expenses. Important: It is essential to have the exact requirements and rules checked by a tax expert.
Renting or owner-occupied: tax differences
Whether you live in your property yourself or rent it out makes a significant difference for tax purposes:
- Rented properties: The income is taxable, but many costs can be claimed as tax deductions. Depreciation, renovation costs, interest payments, and administrative expenses reduce your income and thus reduce your tax burden.
- Own-use property: In this case, there is no rental income, so tax deductions are significantly more limited. However, after the speculation period (usually ten years), owner-occupiers benefit from a tax-free increase in value if the property is sold at a later date.
Both options have their advantages and disadvantages, and you should consult a tax advisor to determine which option is best for your personal situation.
Planning is everything: tax strategies for property buyers
Careful planning of your real estate investment pays off in the long term. Depending on your goals, you should optimize your investment for tax purposes. This starts with the selection of the property, its financing, and its subsequent use.
For example, if you choose properties in need of extensive renovation, you can claim high renovation costs and thus significantly reduce your tax burden. But beware: tax details, deadlines, and maximum limits are complex. Real estate agents are not allowed to provide tax advice, so comprehensive tax support from an expert is essential to take full advantage of your benefits.
Are you looking for optimal tax solutions for your real estate investment? We will put you in touch with experienced tax advisors and find properties where you can benefit from tax advantages. Contact us for a personal consultation. We will be happy to assist you in selecting your property and refer you to trustworthy tax experts who will optimally assess and plan your individual tax situation.
Notes:
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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