Total Rental Income
12.000,00 €
Total Tax on Rental
264,00 €
Total Net Rental Income
486,00 €
Portfolio Net Yield
0.24%
| # | Rent | Expenses | AfA (2%) | Interest | Taxable |
|---|---|---|---|---|---|
| 1 | 12.000,00 € | 2.000,00 € | 4.000,00 € | 5.250,00 € | 750,00 € |
How is a rental property portfolio taxed in Germany?
All rental income and expenses across your properties are combined and reported as a single category (Einkuenfte aus Vermietung und Verpachtung). Losses from one property can offset gains from another. The combined net rental income is then added to your other income and taxed at your progressive income tax rate.
Can losses from one property offset gains from another?
Yes, this is one of the key advantages of a property portfolio in Germany. If one property generates a loss (e.g., due to high renovation costs or mortgage interest), it can offset the rental income from other properties. If total rental losses exceed total rental gains, the excess can even reduce your other taxable income.
What is a good rental yield for German property?
Gross rental yields in Germany typically range from 3-5% in major cities (Berlin, Munich, Hamburg) and can reach 5-8% in smaller cities. Net yields after expenses, depreciation, and taxes are usually 1.5-3.5%. Yields have been compressed in recent years due to rising property prices, but the tax advantages (especially depreciation) improve the effective return.
Disclaimer: These calculations are estimates based on 2025 German tax rules and should not be considered professional tax advice. Consult a Steuerberater for your specific situation.
How multiple rental properties are taxed and managed
How are multiple rental properties taxed?
All rental income is combined into one category (Einkünfte aus Vermietung und Verpachtung) and added to your other income. If you have three properties earning €8,000, €5,000, and €3,000 net respectively, your total rental income of €16,000 is taxed at your personal rate. Losses from one property can offset profits from another.
When does property investment become a commercial activity?
If you buy and sell more than 3 properties within 5 years, the Finanzamt may classify you as a gewerblicher Grundstückshandel (commercial property trader). This triggers Gewerbesteuer on all sales and changes the tax treatment significantly. The 10-year Spekulationsfrist exemption no longer applies. Plan purchases and sales carefully to stay below this threshold.
Should you hold properties personally or through a GmbH?
Holding properties personally gives you the 10-year Spekulationsfrist exemption and lower ongoing tax rates for lower earners. A vermögensverwaltende GmbH pays only about 15.8% tax on rental income (no Gewerbesteuer for pure property management) but pays tax on sales. At higher income levels (above 42% personal rate), a GmbH can save thousands per year.
How does mortgage interest affect portfolio taxes?
Mortgage interest on rental properties is fully deductible against rental income. With €200,000 in mortgages at 3.5% interest, you deduct €7,000 per year. If this creates a loss alongside other deductions, the loss offsets your employment income. This is a key benefit of leveraged property investment in Germany.
What is the Grundsteuer and how does it affect landlords?
Grundsteuer (property tax) is a local tax based on property value and the municipal Hebesatz. The reformed system from 2025 bases it on land value, building type, and living space. Annual Grundsteuer ranges from €200 to €2,000 or more. Landlords can pass this through to tenants as part of Nebenkosten (service charges), but it is also deductible as a business expense.
How do you manage depreciation across a portfolio?
Each property has its own depreciation schedule. Track purchase date, building value (excluding land), and the applicable AfA rate (2% or 3%) separately. Renovation costs above €4,000 per item may need separate depreciation. Keep detailed records for each property in case of a Betriebsprüfung. A portfolio of 5 properties might generate €20,000 or more in combined annual AfA deductions.
Bundesfinanzministerium-Aligned: Based on 2025 Bundesfinanzministerium rates and thresholds. For personal advice, speak to a qualified Steuerberater (tax adviser).
Disclaimer: This calculator provides estimates based on current German tax rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax adviser before making financial decisions. Read our terms
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