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

According to your argument, all owners of a leveraged investment property should not have any additional assets.

No, that's not what I wrote. My argument was that I may leverage a paid-off rental property to finance my private enjoyment (house, car...), but I cannot claim these interest expenses because they arise from private matters and not from the rented residential property, which already exists and is paid off.
Whether I pay for the purchase of a rental property out of my own pocket or take out a loan for it (even though I don't have to) has nothing to do with that.

I think I can follow your line of thought: only through the loan can the OP (or any other person) put the terraced house up for rent. Indirectly, a rental property is created through the new construction. Unfortunately, it does not work like that or is not possible under tax law.

My argument was that I am allowed to mortgage a fully paid-off rented property to finance my private enjoyment (house, car, etc.). But I cannot claim these interest expenses because they arise from private matters and not from rented residential space, since it already exists and is paid for.
Whether I pay for the purchase of a rental property out of my own pocket or take out a loan for it (even though I don't have to) has nothing to do with that.

Person A has €500K and buys an apartment for rental for €500K. He borrows €500K, is allowed to claim the interest for it, and can consume his €500K as he wishes.
Person B has €500K and buys the rental apartment with it. Later he also wants to consume and therefore mortgage the apartment. According to your argument, he should not be allowed to claim the interest then.
However, Article 3 of the Basic Law might speak against this.

Also, purchases financed by already paid-off investment properties would then not be allowed—because the residential space already exists and is paid for. But as I said, I look forward to the sample court rulings.

Hi,

this was just quickly found here in passing.
A rental residential property was also mortgaged here to build a private home.
Case number IX B 134/08

Brief summary:
The loan debt must actually be taken out and used to generate income.
The temporal and economic connection is also missing.
Otherwise, any landlord could repeatedly mortgage a rented property and subsidize private fun. It’s obvious that this is not allowed.
The mortgage is only intended to obtain a better interest rate or to get the loan at all. It always depends on the use.

By the way, there is no legal director in the tax office.
If you mean a retired head, in 90% of all cases these are the people with at least some tax knowledge, as they only manage the office and make personnel decisions. They have almost nothing to do with tax matters.

IX B 134/08

I only skimmed it, but that pretty much sums it up, as far as I understood.

IX B 134/08

Quote: [...] Land charge on a rental residential property [...] Loan for the construction of the single-family house Here a loan was taken out from the bank for the purpose of financing the single-family house, a land charge was registered on the apartment --> loan purpose construction of the single-family house --> of course not tax-effective. If a loan were taken out only on the residential property with a land charge on the apartment, there would be an economic connection according to § 9 para. 1 sentence 3 no. 1 of the Income Tax Act. How would your argument look if, instead of the "luxury car," the money were used for further investments, e.g. the construction of another property as a capital investment?