SteuerGo FAQs

(2022) Rental: Travel to rental property usually fully deductible

Landlords frequently need to travel to their rental property to check on things, carry out renovations, resolve issues with tenants, attend viewings with prospective tenants, do gardening, etc. According to Section 9 (3) of the Income Tax Act, the same rules apply to trips related to rental income as for employees travelling to their workplace.

Therefore, the travel allowance applies if the rental property is considered the primary place of work. But when is this the case? Currently, the Federal Fiscal Court has ruled that landlords can usually deduct trips to their rental properties as business expenses using the business travel allowance of 0.30 Euro per kilometre travelled. This is because, in most cases, a landlord visits the rental property only at irregular intervals, for example, for inspections, administrative tasks, repairs, tenant changes, or meter readings (BFH ruling of 1.12.2015, IX R 18/15).

Exception: However, if the rental property is exceptionally considered the landlord's regular place of work, only the less favourable travel allowance of 0.30 Euro per kilometre (0.35 Euro from the 21st kilometre) applies. This is because, similar to an employee, a landlord can have a regular place of work at the rental property if they visit it not only occasionally but with a certain regularity and continuity. This is the case with an unusually high number of trips and practically daily presence (BFH ruling of 1.12.2015, IX R 18/15).

The case: A landlord renovated several flats and an apartment building and visited the construction sites set up for this purpose 165 and 215 times a year, respectively. Due to the large number of trips to the two properties, the tax office concluded that the landlord had his regular place of work at the rental properties. Therefore, the travel costs were only deductible at the rate of the travel allowance, according to the tax office. The BFH agreed with the tax office.

The Cologne Fiscal Court also recently commented on the issue (judgment of 19.2.2020, 1 K 1209/18). The case: The taxpayer owned two apartment buildings. He claimed his trips to both properties with the actual costs. He assumed a primary place of work at each property. The Cologne Fiscal Court ruled: A primary place of work is where the landlord carries out at least one-third of their activities. The travel expenses are always incurred by both properties. However, the costs of travel between the properties should be based on the actual costs or 0.30 Euro per kilometre travelled. These are not trips between home and the primary place of work but between two primary places of work.

If you partially build a property yourself, the travel costs to the construction site are part of the building's construction costs. These trips should not be calculated with the travel allowance but with the business travel allowance of 30 cents per kilometre travelled or the actual costs. The BFH clarified this 20 years ago (BFH ruling of 10.5.1995, IX R 73/91).