Exchange of apartments.

4 posts in this topic

Hello people! 

 

I have a question for those who are knowledgeable/are familiar with the topic. Please do not comment/reply if you are not sure.

 

I recently bought an apartment and I have the option to live in it (and stop paying rent on the apartment I live now)  or rent it (and make some money out of it - The net rent I will get it is going to be taxed on top of my global income though). 

 

Moreover, if I claim it as an investment (apartment for rent ) the amount of interest I pay to the bank is deductible but I will still have to rent an apartment for myself in the same area.

 

 

One of my best friends bought an apartment in the same area as l did and he is also interested to claim it as an investment due to the benefits he gets BUT he is also renting an apartment for himself in the same area.

 

The question is the following:

 

"Would it be legal to rent our apartments one to the other but live in those we own (Through a house exchange agreement of definite or indefinite time)?"

 

For instance, i am renting his apartment for 500 Euro and he is renting mine 500 Euro. After one month of the rental contract, we make a house exchange agreement for a few years and we return back to our original status having the benefit of claiming for the Furniture, Loan Interest rate and all the related expenses we might have (especially if you but a used apartment and need to renovate it).

 

 

IMPORTANT ==> Please note that the answer I am searching here is purely from a legal perspective and it has to comply with the German law (I live in Munich by the way)!

 

Please answer my question if you know the answer on the topic and in case that there are no obstacles on it, regarding the legality,  could you provide me info/ know-how on how to perform that (in case of some special treatment needed)?

 

Do you think that is a "grey zone" and I have to take an advice from a lawyer or it is something simple that many people do and there is no need to be worried?

 

Kind regards. :rolleyes:

 

 

 

 

 

0

Share this post


Link to post
Share on other sites

What you're talking about is called an Überkreuzvermietung and is recognized for tax purposes under certain circumstances (see my link for more details).

 

Unfortunately for you, one of those circumstances is that the properties in question must lie far enough apart from one another to justify the necessity of you renting from your friend, instead of just living in your place. Since you say it's in the same area, the chances are around 99% that the Finanzamt will not recognize your attempt to deduct your operating expenses in this case.

0

Share this post


Link to post
Share on other sites

On the surface, it sounds like a brilliant idea but I don't know anything about the legalities.

 

The one thing that I do know and have had to learn more than once is that doing business with friends often turns out badly.

1

Share this post


Link to post
Share on other sites
44 minutes ago, fraufruit said:

The one thing that I do know and have had to learn more than once is that doing business with friends often turns out badly.

 

 

Very bad idea indeed!

We have learned tjh very expensive (as in tens of thousands) lesson not to do business with a friend of decades... whom we trusted... who turned round and cheated us blind.

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now