How is rental income taxed when I’m a non-resident landlord?

Short answer: Rental income is taxed in Germany even if you are a non-resident landlord; you file a German return, deduct costs and depreciation, then pay tax at progressive rates, usually offset by treaty credits in your home country.

How rental income is taxed for non-resident landlords:

• Limited tax liability. Because the property is located in Germany, Section 49 EStG classes you as “beschränkt steuerpflichtig.” You must submit Anlage V with a German tax return, regardless of where you live.
• Progressive rates with basic allowance lost. Tax starts at 14 % and tops out at 45 %; non-residents do not receive the €11,604 personal allowance but may apply for the 90 % rule (§1 (3) EStG) if most worldwide income is German-sourced.
• Deductible expenses. Mortgage interest, repairs, agent fees and a straight-line 2 % building depreciation can be offset against gross rent, often reducing taxable profit to zero in the early years.
• Double-taxation treaties. The rental profit is fully taxable in Germany; your home country normally grants a credit, so you don’t pay twice. We attach Form EU-EWR to document the creditable tax.
• Tax filing deadline. Without an adviser: 31 July 2025 for the 2024 year. With our tax team: 28 February 2026.

At Finance for Expats we collect rent statements, mortgage schedules and utility bills, translate them for the Finanzamt, and calculate the optimal depreciation base (land value vs. building). We also set up quarterly pre-payments so you avoid late-interest charges.

Key take-aways:

• German property income remains taxable in Germany even when you live abroad.
• Mortgage interest, repairs and 2 % depreciation slash taxable profit.
• We file your German return, apply treaty credits and keep you penalty-free.