If you rent out an apartment or house in Germany, the income counts as income from renting and leasing under § 21 EStG. The good news: rent receipts are reduced by depreciation (AfA), deductible expenses (Werbungskosten) and loan interest — early years often produce a tax-relevant book loss that lowers your overall tax. Our rental income tax calculator computes the result instantly.
What counts as rental income?
All receipts from leasing land, buildings or apartments are taxable — that means cold rent plus any surplus from service charges. If service-charge income matches passable expenses, the net effect is zero.
The formula
Rental income = Total rent − Deductible expenses − AfA
Tax = rental income × your marginal income tax rate
AfA: straight-line depreciation under §7 (4) EStG
- 2 % p.a. — standard for buildings constructed after 1924
- 2.5 % p.a. — older buildings (constructed before 1925)
- 3 % p.a. — new residential buildings (built after 2022)
Important: only the building share can be depreciated — land cannot. A typical split is 80 % building / 20 % land.
Deductible expenses
Eligible costs include loan interest (not the principal!), maintenance, property tax, non-passable building fees, management costs and travel to the property. Loan principal is not deductible — it is wealth accumulation.
Worked example
Apartment, purchase price €250,000, of which €200,000 is the building share. Cold rent €12,000/year. Loan interest €4,000, property tax €600, non-passable fees €800, maintenance €1,500. Marginal tax rate 42 %.
- Rental income: €12,000
- AfA: €200,000 × 2 % = €4,000
- Deductible expenses: 4,000 + 600 + 800 + 1,500 = €6,900
- Taxable income: 12,000 − 6,900 − 4,000 = €1,100
- Tax: 1,100 × 42 % ≈ €462
Loss offset under §10d EStG
If expenses and AfA exceed rental income, the result is a tax-relevant loss. It is offset against other income (salary, self-employment) — your overall tax falls. Remaining losses are carried back one year or forward into future years.
Related calculators
- Income Tax Calculator — to determine your marginal rate
- Capital Gains Tax Calculator — comparison with Kapitalerträge
- Real Estate Transfer Tax — one-off tax at purchase
- Rental Yield Calculator — gross and net property yield
FAQ
What is the AfA rate for rented property?
Standard 2 % p.a. of the building share. Older buildings (pre-1925) use 2.5 %, new residential buildings (from 2023) 3 %.
Which expenses can I deduct?
Loan interest, maintenance, property tax, non-passable building fees, management costs and travel to the property.
What is loss offset?
Negative rental income reduces other income types under §10d EStG. Common in early years with high interest payments.
Are passable service charges taxable?
No — only the surplus over passable expenses is taxable rental income.
What tax rate applies?
Your personal marginal rate under §32a EStG (14 %–45 %), not the flat 25 % capital gains tax.