Rental: Travel to rental property usually fully deductible

Landlords must visit their rental properties regularly – for example, for inspections, repairs, or viewings. For these journeys, similar tax regulations apply as for employees' journeys to work, according to § 9 para. 3 EStG.

Landlords are generally allowed to deduct the business travel allowance of 0,30 Euro per kilometre driven as business expenses. The Federal Fiscal Court (BFH) has confirmed that this allowance is generally applicable.

Exception: Primary place of work at the rental property

Different rules apply if the rental property becomes the landlord's primary place of work. In this case, only the commuting allowance of 0.30 Euro per kilometre (or 0.38 Euro from the 21st kilometre) is applicable.

When is there a primary place of work?

• If the landlord visits the property not just occasionally, but regularly and consistently – almost daily.
• According to the Cologne Tax Court, a primary place of work exists if at least one third of the total activity is carried out at the respective property.

Journeys for self-build projects

If a landlord constructs a building partially through self-build, journeys to the construction site cannot be claimed with the commuting allowance, but only with the business travel allowance of 30 cents per kilometre driven or with the actual costs (BFH ruling of 10.05.1995, IX R 73/91). In this case, the travel costs are part of the construction costs of the building.

Special case: Holiday homes

Journeys to the holiday home: Commuting allowance instead of travel expenses?

Those who rent out a holiday home often travel there several times a year – for example, for renovation work. The question is: Are these journeys deductible with the business travel allowance (30 cents per kilometre driven) or only with the commuting allowance (30/38 cents per kilometre)?

This question is relevant if the holiday home becomes the primary place of work. In this case, only the commuting allowance may be applied.

Ruling of the Münster Tax Court: Commuting allowance and reduction due to private share

In a recent case (Münster Tax Court, ruling of 15.05.2025, 12 K 1916/21 F), the court decided:

• A partnership of father and son rented out several holiday homes with the support of a manager.
• For two properties, the partnership claimed travel expenses for 77 days as well as additional meal expenses according to travel expense principles.
• The tax office did not fully recognise the expenses and reduced them due to suspected private involvement.

The court largely confirmed this reduction:

• Additional meal expenses are not deductible.
• Travel expenses are only deductible with the commuting allowance – and only partially, as private purposes were also involved.

Reasoning of the court

• The holiday homes are considered primary places of work as they were visited in more than one third of the activities.
• According to § 9 para. 3 EStG, the primary place of work in connection with renting must be assessed on an object basis.
• Private involvement (e.g. holiday elements) must not be disregarded – in the case of mixed use, an estimate is permissible.
• However, excessive proof requirements must not be imposed on the taxpayer, especially for self-build projects.

Note: Meal expenses can only be claimed for the first three months – this period had already expired in the year in dispute.

Important: Although the appeal to the Federal Fiscal Court was allowed, it was not lodged. The ruling of the Münster Tax Court is therefore legally binding and is likely to be pioneering for many similar cases.

Rental: Travel to rental property usually fully deductible

What are income-related expenses in connection with the rental and leasing of a property?

You can deduct expenses incurred in generating income from renting and leasing. These expenses are costs incurred for the acquisition, security, and maintenance of the property. The expenses are deducted from the rental income. A positive result, i.e., a profit, increases your tax burden. A negative result leads to a tax saving.

A tax loss from renting and leasing, caused by high expenses, can be offset against other positive income. The decisive factor for entering the expenses in the tax return is the date of payment. When the expenses were incurred or when you received the invoice is generally irrelevant.

You can also claim expenses if the property is not yet rented. However, there must be an intention to rent. If you do this, the tax office will initially recognise the costs but will issue the tax assessment on a provisional basis. If you do not rent out the property, the tax office may revoke the deduction of expenses.

What are income-related expenses in connection with the rental and leasing of a property?

Which costs can I deduct as income-related expenses?

If you rent out a property, you can deduct all expenses related to the property as income-related expenses. These include, among others:

• Property tax
• Loan interest
• Depreciation
• Insurance premiums
• Costs for electricity, water and heating, sewage, waste disposal, etc.
• Expenses for caretakers and property management
• Cosmetic repairs
• Costs for furniture in furnished rentals
• Travel expenses to the property

You can also declare service charges billed to the tenant as income-related expenses if they are included as income in the tax return.

Which costs can I deduct as income-related expenses?

Can a home office be deducted for rental activities?

Expenses for a home office and its furnishings are only fully deductible as business expenses if the home office is the central location for all professional activities. Alternatively, an annual allowance of 1,260 Euro can be claimed. This is at the taxpayer's discretion. If the conditions for the deduction are not met in a given month, the annual allowance is reduced accordingly. However, there must be an actual home office with its own four walls.

In some cases, such as a landlord managing properties, the home office can be deducted as business expenses against rental income, or the allowance can be used.

If no other permanent workplace is available for professional activities, home office costs can be deducted with a daily allowance of 6 Euro per day, up to a maximum of 1,260 Euro per year. A separate home office is not required; even a work corner or the kitchen table is sufficient. The daily allowance can only be claimed once per calendar day for all professional activities in the home.

Example: A bus driver (Z) is also a freelance writer and involved in property rental. As Z has no other permanent workplace for these activities, he can deduct a daily allowance of 6 Euro for each day he carries out these activities from home, up to a maximum of 1,260 Euro per year. Even if Z works as a bus driver on the same day, the deduction of the daily allowance for the other activities is not affected. Z can allocate the allowance either proportionally to freelance income or rental income, or fully to one of these types of income.

Important: You must prove that no other permanent workplace is available to you for the respective professional or business activity. A corresponding certificate from the employer can be helpful evidence.

Can a home office be deducted for rental activities?