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 income tax rate in Germany is 14 %, applied progressively once income exceeds the basic allowance of € 12,348 (for 2026). The tax rate increases with income up to a maximum of 42 %, and for very high incomes above € 277,825, a top rate of 45 % applies.

Rental income is taxed together with your other income according to this progressive rate.

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 2025 tax year by the 31st of July, 2026.

If the tax return is filled by a tax advisor or a filling assistance association, the filing deadline is extended to 28st of February, 2027.

If you file your tax return voluntarily, you have 4 years to file your tax return to the tax office, until 31st of December, 2029 for the year 2025.

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