FAQ
Germany - Pacht

The lease agreement expresses the relationship between the tenant and the landlord. This means that the tenant can not only use a certain thing, but can also make a profit from it (a farmer as a tenant can cultivate a field and at the same time can keep the crops and profit from it). The landlord receives payment for this ‑ rent.

For more information on lease agreement, see the blog article.

The lowest rate is currently 14%, the so‑called input tax rate. From this 14%, the tax rate increases progressively with increasing taxable income up to a highest tax rate of 42%.

For more information on rental income tax in Germany, see the blog article.

The biggest difference between short‑term renting and classical renting is the rental period.

Short‑term landlords can rent out their property for a maximum of 6 months, whereas for classic renting the contract is a minimum of 15 months depending on the type of contract.

The duration of a short‑term renting is usually a few days to a few weeks, but always less than 6 months.

For more information on renting property in Germany, please see the blog article.

If parts of an owner‑occupied flat or family house or another house used by the taxpayer as a whole are temporarily rented out and the income from this does not exceed €520 in the tax year, the taxation of the income may be waived for simplification purposes with the taxpayer's consent.

The most commonly deductible expenses related to rental property include:

• property tax,
• loan costs,
• accounting costs,
• repair and renovation costs,
• travel costs,
• insurance,
• property operating costs,
• financing costs (appraisal, notary, land registry fees),
• advertising costs,
• street cleaning, garbage collection,
• debt interest on the financing of the rental property,
• depreciation of the building.

For more information about renting property in Germany, please see the blog article.

Anyone required to file a tax return must file a return for the 2023 tax year by the 30th of September, 2024.

If the tax return is filled by a tax advisor or a filling assistance association, the filing deadline is extended to 31st of July, 2025.

If you file your tax return voluntarily, you have 4 years to file your tax return to the tax office, until 31st of December, 2027 for the year 2023.

If you miss the deadline, you must expect a penalty.