It is easy to remember this simple rule: All investments, which are either for renovation or maintenance of your property, are fully deductible. So far so good, but the question arises now: How to make difference between costs that are tax-deductible and those costs that increase the value of the property?
- Value-preservingare all those costs that maintain something existing, repair or replace it. This is the case, for example, when you repaint the walls of your property or replace your kitchen. This category includes all maintenance and renovation works. However, non-deductible are consumption-dependent costs such as electricity, water, gas or oil.
- Appreciation of the value of a real estate is the result of adding something new to the property. This refers to, for example, the construction of a winter garden or balcony glazing. Suchlike costs cannot be deducted in your tax calculation because they do not have a maintenance component.
Collect and keep all documents!
A tip: Keep all documents related to the investments in your property – including value-adding investments. The reason is simple: If you sell your property, you must pay a real estate tax on the difference between your purchase and your selling price. You can deduct the sum of value-adding investments if you can prove them. It is therefore worthwhile to keep all the documents.
We can support you
In the case of major renovations or maintenance works, Steuerzentrum will make calculation of deductibles for relevant tax office. We can also make calculation of the impact of the upcoming renovation on your tax calculation. In this way, you can concentrate fully on the construction work and we will handle your taxes.