Construction of a granny flat, financing + tax benefits, how to proceed?

: As a landlord, you have a tax allowance. I believe it is just under €16,000 per year and per couple. You can ask the exact amount at the tax office or from a tax advisor. The low rental rate is more family-friendly than tax-saving.

Regarding the initial question: We had a house with a granny flat. After we could no longer agree on a tenant some time ago, the apartment was a great storage space for all kinds of stuff. Unlike friends, we were spared from rent nomads. We have now built without a granny flat and are glad not to have to worry about tenants anymore.

: As a landlord, you have a tax allowance. I think it is just under €16,000 per year and per couple.

What kind of tax allowance?

Hello,

separate loans due to the deduction / offsetting of interest is a must. Especially in BW, the checks are more stringent. In your place, I would otherwise consult a knowledgeable tax advisor from your area! You can certainly also deduct those few euros... You can also ask the tax office, but I don't know if they will answer your tax questions in detail.

Oh dear, you’re offline for just a few hours and suddenly there are a flood of replies Thanks first of all to everyone.

In my opinion, financing the whole thing through a loan makes sense if you generally finance with a lot of external capital. With 100% external capital, I can also allocate according to square meters of living space, and since the owner-occupied part is usually finished to a higher standard, you even have a benefit.

However, we are financing with 50% equity. So it does make a difference of a few euros in the end if you take out separate loans. We will also talk to the construction companies and craftsmen about getting separate invoices.

Only thing I don’t quite understand yet. If I finance through separate loans, what about the amounts where there is only one invoice that must be allocated proportionally? Can these amounts, calculated proportionally for the granny flat, also be financed via the granny flat loan, or must they be financed through the house loan?

Thanks in advance.

I already wrote that a division according to m² is a sensible basis for apportionment. For the interior work, you have to decide for yourself what is cheaper for you, whether separate invoices or also a division according to m². It doesn’t matter from which loan something is paid, you will in any case pay the invoices from your house construction account or private account and not directly from the loan.

What kind of tax allowance?

The general basic tax allowance. With a small rental apartment, the income from letting and leasing after deducting expenses will certainly not be very high. There probably won't be much to tax at the end of the year. Or do you see it differently as an expert?