Income tax on rent, worked example, in Germany

Taxation Researcher | October 05, 2018

Non-resident couple´s joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income 18,000 72,000 144,000
Less Costs2 (1,500) (5,100) (9,200)
Less Depreciation3 (5,701) (20,160) (40,320)
= Taxable Income 10,799 46,740 94,480
Income Tax Rates
Income Tax Due 462 11,545 31,617
Annual Income Tax Due €462 €11,545 €31,617
Surtax
Solidarity surcharge 5.5%4 25 634 1,738
Annual Income Tax Due €487 €12,179 €33,355
Tax Due as % of Gross Income 2.71% 16.91% 23.16%
Source:
Global Property Guide


1 The property is jointly owned by husband and wife.

2 Estimated values. Actually incurred expenses effectively connected with the property can be deducted from the gross rental income to arrive at the taxable income (property management fees, maintenance and repairs, etc.).

3 Depreciation is available on the building only, not on the land. For properties with land, it is assumed that 70% of the total costs accounts for the building.

4 The 5.5% solidarity surcharge is levied on the annual income tax liability.


INCOME TAX 2010

TAXABLE INCOME, (€) TAX RATE
Up to €8,004 0%
€8,005 - €13,469 14% - 23.97%
€13,470 - €52,881 23.97% - 42%
€52,882 - €250,730 42%
Over €250,730 45%
Source: Global Property Guide