Income tax (Einkommensteuer)
There is no income tax on the so-called “self-rent” or private use of your own property.
In other words: if you own a house or flat which you or your family live in yourself, this does not generate taxable income, and therefore you do not pay income tax on simply living in your own home.
But: you also cannot
deduct the costs related to the property (e.g. mortgage interest, repairs, maintenance, Grundsteuer),
in your income tax return, because you are not earning any rental income from it.
Annual property tax (Grundsteuer)
Yes, you always pay Grundsteuer as the owner – even if you live in the house yourself.
This is a yearly property tax applied to all real estate, regardless of whether it is rented out or owner-occupied.
Real estate transfer tax (Grunderwerbsteuer)
This tax is paid once only, at the time you buy the property – whether you buy it for your own use or as an investment to rent out.
What if you rent out part of your home?
If you rent out, for example, a room or a separate floor:
you must pay income tax on the rental income, and
you can deduct a proportional share of the related costs as expenses (based on the percentage of floor area rented).
Quick summary
| Situation | Income tax? |
|---|---|
| You live only in your own home | No |
| You rent out the whole property | Yes |
| You rent out part and live in the rest | Only on the rented part |
| You inherited a house and live in it | No income tax (but Grundsteuer applies) |
The editorial team of our website strives to provide accurate information based on thorough research and multiple sources. Nevertheless, errors may occur or some information may not be fully confirmed. Therefore, please treat the information in these articles as an initial guide and always contact the competent authorities or professional advisors for binding and up-to-date details.
