Residential Property Insurance and Taxes

The homeowners insurance covers costs incurred in case of damage to the building. Landlords and owners ask themselves again and again the question of whether the contributions to the homeowners insurance are tax deductible. For the time being, the answer is no. There is one exception: If you are self-employed or freelancer and use the house / room for your professional activity. In the following article we have summarized some information that may be of interest to you and important for homeowners insurance.


So the homeowners insurance is treated in the tax

homeowners insurance

As a real estate owner, homeowner insurance is indispensable. Because a major fire or roof can make a building uninhabitable and cause high costs that can go into hundreds of thousands of euros. Imm again, policyholders ask the question of whether the contributions to homeowners insurance can be deducted from the tax .

What seems like comparable at first glance should not be confused. In contrast to private liability insurance, the legislator does not classify building insurance as a precautionary measure. Only these can be claimed in the tax return. Therefore, as the owner of owner-occupied real estate, you have no opportunity to deduct the contributions to homeowners insurance tax .


As landlord tax deduct the homeowners insurance

landlord tax

Even as a landlord changes the situation currently nothing: the homeowners insurance can not be deducted from the tax . However, as a landlord, you have the option of settling insurance premiums for “rental and leasing business expenses” and thus transferring them to the tenants. The basis for this is provided by § 2 of the Operating Costs Ordinance, which explicitly mentions homeowners’ insurance as recoverable ancillary costs.

As a landlord, you are bound by the economic efficiency requirement in the service charge settlement and may not conclude any policies that contradict or disadvantage the interests of the lessee. If there is any damage, the landlord is obliged to remedy this.


Important services in building insurance

Important services in building insurance

In the homeowners insurance there are also benefits that are also payable for rent payments for a replacement accommodation, if the damaged property can not be occupied for a long period and there are no other possibilities. Anyone who lives in a condominium usually pays the insurance premiums via the house money . Thus, the members of homeowner communities cover the operating costs.


Homeowners insurance is tax deductible

An exception here is for owners, if they live in their property and use individual rooms for work. It is important to know that these rooms are clearly and distinctly separated from the living space and that they are predominantly used for work. In this case, the costs of the building insurance are deductible proportionally to the used office from the tax. You can claim the calculated share as income-related expenses or – if you are self-employed – as operating expenses in the tax.

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