The tax treatment of property management costs depends largely on whether you are a private individual or a business. Both groups have different requirements - and different possibilities for tax deductions.
Private owners: income-related expenses when renting out
Private individuals who rent out properties can deduct property management costs as income-related expenses in their income tax return. This applies, for example, to:
Rental apartments
rented single-family homes
Parts of owner-occupied properties (e.g. granny apartment)
Important: The costs must be clearly attributable to letting. In the case of mixed-use properties (e.g. partly owner-occupied, partly rented), a clear allocation is necessary.
Not deductible: If you use your property exclusively yourself, you cannot generally claim the costs of property management against tax.
Commercial owners: business expenses instead of income-related expenses
Commercial property owners - i.e. companies that hold property for rent or as part of their business assets - recognize the costs as business expenses. This often brings advantages:
No upper limit for deductions
Direct link to operational activities
Possibility of input tax refund (with corresponding VAT liability)
Conclusion: Commercial owners usually have greater tax leeway, private landlords need to differentiate more precisely.
