Feasibility single-family house + land 550k-600k NRW

Where did you get the information that your construct works like that?

Because I did it that way – only that I invested the free capital in other investments – and yes, I could have also bought a flashy car, nobody would have cared. If you have 10 million in the account, you can also buy a rental property, finance it 100% (if the bank agrees) and deduct the interest from taxes. With your 10 million, you can still do whatever you want. Overall, there must always be an intention to make a profit behind the investment, i.e., in the medium term the rental income must be higher than the expenses (interest, depreciation, renovation), i.e., overall it is good for the state because tax revenues are generated.

Yes, I can finance even though I don’t have to, and tax-deduct the interest. I’m with you on that. But if no taxable income is generated with the loan, then there is nothing deductible. That has nothing to do with whether I have little money or am a multimillionaire.

But that only works as long as your explanation is not checked thoroughly. Actually, it is not really deductible in this situation. You are just lucky with your caseworker, at least so far. If someone were to take a look at the loan agreement, you would have a rude awakening. However, almost all authorities are hopelessly overloaded anyway, so you should be thankful every year when everything has gone well.

That only works as long as your explanation is not checked exactly

It always works, is completely legal, and is the normal state at countless companies that the real estate is financed even though there is a lot of free cash in the company and billions in profits are made...

But if no taxable income is generated with the loan, nothing can be deducted either. That has nothing to do with whether I have hardly any money or am a multimillionaire.

That is exactly the point. But since he wants to rent out the terraced house and will most likely earn income from it, the financing of the middle terraced house is tax-deductible from the time of the rental. Of course, as long as he still lives in it, it is not deductible ...

I still say no, that’s not possible. And I also don’t think you can compare that with companies, since different tax rules apply there in some cases. But it doesn’t matter how you do it yourself. The main thing is that the [TE] gets advice beforehand.