Private or business: which part is relevant for you?
Private rental: You rent out an apartment, a house or a holiday home that you own as part of your private assets, without hotel-like services. In this case, you don't write an invoice in Accountable. Income and costs go into the Anlage V of your income tax return, not into the EÜR. You'll find everything else you need to know in our article on the Anlage V.
Renting as part of your self-employment: Here, an invoice can make sense, for example, if:
You sublet part of your office space. For instance, you rent an office and pass on one room to another person. The sublease income then counts as business income.
You rent out holiday homes with hotel-like services. If you offer breakfast, daily cleaning, or a reception service, for example, the rental may be considered commercial. This means you're subject to trade tax (Gewerbesteuer) for it. Your guests will usually expect an invoice.
The rented property is part of your business assets. You'll find out what that means in the next section.
What you should know about business assets
When it comes to property you own, the tax office doesn't look at the building as a whole but at its individual parts and how you use them. The part you use for your business yourself, for example, as an office or workshop, usually counts as business assets automatically, even if it only makes up a small part of the property. There are exceptions for parts of minor value. Parts you rent out to others generally belong to your private assets. You then report the rental income in Anlage V. Under certain circumstances, however, you can voluntarily assign them to your business assets.
This isn't automatically a disadvantage, but it has a few consequences you should be aware of:
Moving it back to private assets later: If you want to hold the property privately again at some point, this counts as a withdrawal (Entnahme). Any increase in value since it was added to your business assets is then taxed.
Sale: You can usually sell private property tax-free after 10 years. For property held as business assets, however, any capital gain from the sale is taxable.
Whether and to what extent your property belongs to your business assets depends on your situation. It's best to clarify this with a tax advisor beforehand.
Which VAT rate applies?
Most rentals are exempt from VAT. However, there are some important exceptions:
Type of rental | VAT | Note |
Long-term rental of residential space | Exempt (§ 4 No. 12a UStG) | Opting into VAT isn't possible here. |
Commercial premises rented to businesses (e.g. office, sublet to self-employed people) | Generally exempt, option for 19% possible (§ 9 UStG) | The option is only available if the tenant uses the premises for VAT-liable sales. Advantage: you can deduct the input VAT from your costs. |
Short-term rental, e.g. holiday home or guest room | 7% | Considered commercial if hotel-like services are included. You report the VAT in your VAT advance return or annual VAT return. Additional services such as breakfast or drinks may be subject to a different VAT rate. |
Separately rented parking spaces or garages | 19% | If the parking space belongs to your business, VAT must be charged. If it's privately owned, belongs to the apartment and is rented out together with it, it's usually exempt. |
If you're a small business owner (Kleinunternehmer), you don't show any VAT on your invoice, not even for rentals that would otherwise be subject to VAT.
EÜR or Anlage V: where does your rental income belong?
What matters is whether the rental is part of your business or private. Income and costs always belong in the same place.
| Anlage V | EÜR |
When? | Rental from private assets, e.g. an apartment, a house or a holiday home without hotel-like services | Sublet of business premises, commercial rental or property held as business assets |
Income | Rent and advance payments for utilities in the Anlage V | Business income, e.g. via an invoice in Accountable |
Costs | As income-related expenses (Werbungskosten) in the Anlage V, e.g. depreciation, loan interest, repairs, property tax | As business expenses in the EÜR |
In Accountable | No invoice, no booking as business income | Write an invoice and record costs as expenses |
Holiday home: Anlage V, but VAT still applies
If you rent out a holiday home privately, income and costs go into the Anlage V. Because short-term rentals are subject to VAT, you still need to report the VAT separately in your VAT advance return or annual VAT return, unless you use the small business regulation (Kleinunternehmerregelung). Unfortunately, this isn't possible via Accountable yet. It's best to speak with a tax advisor about this.
In a nutshell
Private rental: no invoice in Accountable; income and costs go into the Anlage V.
Private holiday home: income and costs go into the Anlage V, but you still report the VAT (7%) separately, unless you're a small business owner.
Sublet of business premises or commercial rental: invoice in Accountable, income and costs go into the EÜR.
Parts of your property you use yourself usually belong to your business assets automatically. Before voluntarily adding other parts, get advice, as moving them back can be costly from a tax perspective.
VAT: residential space is exempt, holiday homes are subject to 7%, separate parking spaces to 19%, and for commercial premises you may be able to opt into VAT under certain conditions.
If you have individual questions, our Tax Coaches and Accountable's network of partner tax advisors are happy to help.