Renovate water channel: landlords can deduct costs immediately

The old house is demolished and the new building rented out: The landlord can then deduct the costs of modernizing or repairing a drainage canal directly from the tax.

Berlin (dpa / tmn) - If landlords repair an existing sewer system, they can deduct the costs directly from income tax as advertising costs.

"Because the repair only serves to preserve the property - nothing more," explains Isabel Klocke from the taxpayers' association with a view to a decision by the Federal Fiscal Court (file number: IX R 2/19).

In this case, the plaintiff demolished an old house and put a new two-family house on the property, which he then wanted to rent. To do this, he had to repair damage to an existing sewer that had arisen from root ingrowth. The work was carried out on public and private land. For this, the man paid 10 070 euros, which he claimed directly in his income tax return as advertising costs.

Rightly so, as the Federal Finance Court decided. Expenditures for the renovation of already existing sewers are not manufacturing or acquisition costs for the building, according to the judges - and therefore the costs do not have to be amortized over several years.

The plaintiff, on the other hand, was not allowed to immediately withdraw 535 euros, which were allotted to the first house connection for the new building. Because this was not a conservation measure.

Affected taxpayers can rely on the judgment. If the tax office refuses to deduct advertising costs for rehabilitation expenses in connection with an at least partially still functioning sewage system, an objection to the tax assessment should be filed. "Be sure to state the file number in the objection," advises Klocke.