Monthly Archives - November 2018

VAT for furnished flats rented out temporarily?

Please note: This article reflects the opinion of Crocodilian. This is no legally binding information.
As a temporary housing agency, we cannot and must not advise you on tax issues.

Do landlords of a furnished apartment have to pay VAT? If so, when exactly? Is it also possible to let an apartment temporarily without paying 7% VAT?

Umsatzsteuer möblierte Wohnung auf Zeit

Many landlords of Crocodilian ask us these questions. Most landlords would like to avoid the value added tax and/or do not want to concern themselves at all closer with this topic.
In addition, they also fear that their apartment will be too expensive for private tenants if 7% VAT is added to the rental price or that the rentability of the apartment will be restricted as a result. Under certain circumstances the landlords can even profit from the VAT obligation. The 7% input tax of your rental income can then be offset against the input tax of agency fees, other current expenses, or the acquisition costs for furniture and equipment.
The question as to whether temporary letting is subject to VAT cannot be answered in general. It always depends on the individual case.

Our tip: Clarify all detailed questions to the VAT with your tax consultant.

  1. No VAT for renting out furnished apartments
    Good news: If your income from temporary rentals is less than 17500 euros and you do not expect to earn more than 50,000 euros in the following year, you will not be liable to VAT. Then you are subject to the small business regulation §19 (1) UStG anyway. However, this only applies if you do not receive any further income from other entrepreneurial activities.
  2. Higher total turnover and other entrepreneurial activities
    If the landlord is entrepreneurial, the situation is different. In this case the turnover limits of 17500 and 50 000 Euro do not only refer to the turnover achieved with the letting. Here the total turnover is decisive, i.e. all income which the landlord earns through entrepreneurial activities. These will then very probably exceed the 50,000 euro limit. This means that the landlord is no longer subject to the small business regulation. In this case he must calculate with 7% VAT on the rent, e.g. when letting of a vacation home to tourists.

What are the legal requirements for temporary rentals?

In Berlin, the ban on misappropriation of apartments (Zweckentfremdungsverbot) has already been in force for several years. Accordingly, landlords may not rent to tourists without a permit, but only to people who come to Berlin to work or to trainees.
The target group for temporary accommodation in Berlin are people who would like to live in Berlin for a longer period of time and who also register here. The vast majority of tenants register, because without an address they cannot open a bank account, get no Schufa and also no mobile phone contract.

Difference of long- and short-term letting

The legislator distinguishes between long-term and short-term rentals, normal, permanent rentals and short-term rentals (“rentals of residential and dormitories for short-term accommodation”).
There is no sales tax on normal, long-term letting of residential space.

Short-term rentals – include:

  • Letting of holiday apartments to tenants who are “for pleasure” temporary in Berlin
  • Letting to persons who work in Berlin for a limited period of time. For example, the tenant has a three-month work stay in Berlin and then returns to his home town.

Indications of long-term, “permanent” letting are the following:

  • Either the tenant is staying in Berlin for more than 6 months
  • Or the tenant is in Berlin, has a job here, is registered in Berlin and pays taxes here.

Tip for landlords of furnished apartments:

Talk to your tax advisor

Most tax consultants, if they are not specialized in real estate, are understandably not familiar with temporary letting. Therefore, the question of whether 7% VAT has to be charged on the rent is usually answered in the affirmative.
It would be useful if you explained this leasing model to the tax consultant. The tax office has a lot of room for manoeuvre, so it is worth considering details instead of classifying everything as a short-term letting.
For tenants who rent on a temporary basis, the rented apartment is the first place of residence. The amount of tenants who only spend a short time in Berlin to work here for a limited period is much lower.
Many tenants first rent for a few months and then extend their lease again and again. Most tenancy agreements include an extension option. In our opinion, the extension option also contradicts the short-term nature of the lease.

Summary:

As a small entrepreneur with a maximum rent of 17500 Euro – and no further income from commercial activities, you are not subject to sales tax.
All other landlords with higher incomes should consult their tax consultant and explain the rental model in detail.

Categories: Uncategorized

Wedding – the Insider Tip for Temporary Rentals in Berlin

Wedding is the insider tip for temporary living. If you are moving to Berlin and still want to get to know the original Berlin and a largely authentic neighborhood, Wedding is a good choice. Gentrification in Wedding is still not very advanced and living space is still cheaper than in other districts.
Wedding also surprises newcomers with many large parks that invite them to relax and unwind. Those interested in culture will find something interesting in Wedding, off the beaten track.

Questions about living in Wedding are answered here

 

1.) Is temporary or permanent living in Wedding expensive?
2.)Is it Wedding or “der” Wedding – “in” Wedding or “im” Wedding
3.) Does one live centrally in Wedding? What is the connection like?
4.) Who lives in Wedding?
5.) How do you live in Wedding?
6.) What are the shopping possibilities in Wedding?
7.) What can you do in Wedding?
8.) Who likes to live in Wedding?
9.) Is living in Wedding dangerous?
10.) Are there many tourists in Wedding?
11.) What sights are there in Wedding?

 

1.) Is temporary or permanent living in Wedding expensive?

The rent level has also risen in Wedding in recent years. However, on average it is still below the Berlin average. If you are looking for a cheap, furnished apartment for a limited period of time or an apartment for an indefinite rent, you will be more likely to find it in Berlin Wedding than in other parts of the city. However, there are exceptions here as well, namely apartments that are absolutely overpriced. On average, Berlin Wedding offers a good price-performance ratio.

 

House in Wedding

 

2.) Is it Wedding or “der” Wedding – “in” Wedding or “im” Wedding?

Correctly one says “the Wedding” and “in the Wedding”. The Berliner also says “uff’m Wedding”. Wedding is one of the few place names in German that have an article.

 

3.) Does one live centrally in Wedding? What is the connection like?

Since 2002, Wedding has officially belonged to the Mitte district, although Mitte has a completely different character. The good thing about Wedding is its central location. With the U6 you are in Mitte, Kreuzberg, with the U4 in City West, with the tram M13 in Friedrichshain at the Warschauerstr. Not to forget the connection to the Ringbahn with the S-Bahn stations Wedding and Gesundbrunnen. From Wedding you can also quickly reach Berlin Tegel Airport. This location is extremely practical for those of you who rent an apartment for a limited period and are weekend home flyers.

 

Malplaquetstr Berlin Wedding

 

4.) Who lives in Wedding?

Wedding is a multi-cultural district. 48% of all residents have a migration background.
The residents of Wedding come from abroad:
– Germany: 52
– Turkey: 8% Africa: 6%
– Africa: 6% Arab states
– Arabic states: 6%
– Poland: 6 %
– former Yugoslavia: 5%.
– former SU: 2%
– Asia: 4% The Wedding is still
Wedding is still a working class district, or a district of small people. In addition, Wedding is the most popular neighbourhood among students, just behind Neukölln.
n-between, more and more artists, young people and even higher earners are discovering the special charm of Wedding for themselves and moving to the neighbourhood. Here, too, you will find original cafes, speciality cafes, second-hand shops and organic shops.

 

Cafe im Wedding

 

5.) How do you live in Wedding?

In Wedding, in the southern part adjacent to the centre, you will find the typical Berlin apartment buildings with backyards. Many of them were demolished in the 60s and 70s. One example is the infamous Meyers Hof in Ackerstr. 132, an extremely densely built-up tenement with six backyards. In Wedding these buildings were replaced by modern social housing buildings.
In the northern part of Wedding there are many settlements from the 20s and 30s, such as the African Quarter and the settlement Schillerpark.

 

Obst - und Gemüsegeschäft in Berlin Wedding

 

 

6.) What are the shopping possibilities in Wedding?

Wedding is a good place for shopping. Especially fruit and vegetables. For vegetarians, vegans and fruit and vegetable lovers, living in Wedding is highly recommended. You only have to be strong when passing the Halal butcher’s shops. In addition to the many Turkish fruit and vegetable traders, there is also a wide range of weekly markets, including organic markets, such as the market at Rathaus Wedding Center, Ostender Str, Leopoldplatz, Gesundbrunnen (Iranian/Reinickendorfer Str) and Nettelbeckplatz. The prices are moderate and lower than in other parts of the city.
The main shopping street is Müllerstraße. A branch of the Karstadt department store chain is also located here. A large shopping center is located at the S-Bahn station Gesundbrunnen.

 

Rehberge Wedding

 

 

7.) What are the shopping possibilities in Wedding?

– Walking, doing sports, lazing around in the park
Many people think of Wedding as grey rental cash registers. Very few people know that Wedding is a very green district with many parks. Why take long journeys to the Tiergarten when the most beautiful parks are around the corner? The largest is the landscape park Rehberge, where you will find lakes, natural meadows and many trees. There is also a zoo, an open-air cinema and many sports facilities. The Goethepark is located next to Rehberge. In the English quarter you will find the Schillerpark and further east the Humboldthain.
– Swimming in the Plötzensee

 

Rehberge Berlin Wedding Wiese

 

8.) Who likes to live in Wedding?

Turkish fruit and vegetable shops, Arab hairdressers, Indian restaurants, Asian supermarkets. All this can be found in Wedding. And people from all over the world. Other districts may be more beautiful, and in fact it’s not always love at first sight with most Wedding fans. But once you’ve fallen for the rough charm of Wedding, you usually don’t want to leave. Here you’ll find what often doesn’t exist anymore in other districts: A colourful mixture of different cultures, diversity and authenticity. If you like that, you will feel at home in Wedding.

 

 

9.) Is living in Wedding dangerous?

Wedding doesn’t have the very best reputation. Most of those who talk badly about Wedding have not been there themselves yet. Even many Berliners know Wedding only from stories.
The crime rate in Wedding is indeed higher than in Berlin as a whole. That doesn’t mean, of course, that temporary living in Wedding is unsafe. The crime rate in Berlin is below that of other European and other metropolises. You are right in Wedding if you know how to interpret statistics. And if you are aware of the fact that you have to protect yourself from pickpockets everywhere and also lock the apartment door.

 

DSC02764

 

10.) Are there many tourists in Wedding?

No. Tourists are mainly to be found at “Berliner Unterwelten”, in the Bernauer Str. memorial centre (the centre is in Wedding, the death strip in the centre) and in the Mauerpark between Wedding and Prenzlauer Berg. However, Wedding is not yet on the tourist route – no hop on hop-off bus stops there. You can still experience the authentic Wedding and discover it for yourself.

 

11.) What sights are there in Wedding?

Wedding does not offer the usual tourist attractions. In addition to the “Berlin Underworlds”, the Wall Memorial and the Wall Park, there is interesting architecture, for example. In the 20 years Wedding was avant-garde. New living was the buzzword. After the 1st World War there was a great housing shortage. Here, the best architects built apartments for workers – including Bruno Taut, the Friedrich-Ebert-Siedlung and the Schillerpark estate. One of the most famous architects of the 20th century, Mies van der Rohe, also stands on the African Road. In contrast to the tenements of that time – 40% of the apartments consisted of one room, the WC was located on half a staircase in the staircase and was shared with other tenants, these houses were extremely comfortable in terms of size and equipment. In addition, they still look modern.
Also of interest are the Wedding Crematorium in Antonstr., Berlin’s first crematorium, built in 1910, now a cultural centre, and the Old Nazareth Church in Schinkel dating from 1835.

 

Berlin Wedding

Storage Space in a Furnished Apartment

Are you moving to a new city and looking for a temporary furnished apartment for the transition? The question quickly arises: where to put your own furniture, books, clothes, personal items and your own household? What is the best solution here? Move with everything or store everything? Or maybe sublet your own apartment with all your inventory?
Before you make a decision here, you should know what is not possible if you rent an apartment on time. Bringing your entire household with furniture into the rented apartment is a no-go. Temporary living is not meant for that. The idea is: the tenant arrives with one or two suitcases and everything he needs for the next few months is available in the apartment.

Storage space in furnished apartment

1. What do I do with my own Furniture if I rent an Apartment for a limited Period of Time?

Apartments that are rented out furnished for a limited period of time are usually fully and not partially furnished.
The tenancy agreement also stipulates that the tenant may not change the furniture or move furniture. Nor is it permissible to store the furniture of the furnished apartment externally or in the cellar and to bring your own furniture with you instead. By the way, cellars are not rented out with the time rental. Therefore you should store your own furniture etc., but not bring it with you to Berlin.

2. Why do Landlords not rent out the Cellar of a furnished Flat?

In Berlin, the cellars in old buildings are often damp and not suitable for storing furniture, books, clothing and everything that gets moldy. Cellars often also smell slightly musty. In addition, cellars can be flooded both in old and new buildings.

Burglaries in cellars are also quite common in Berlin. Valuable objects, and/or everything, on which one hangs, should be stored therefore as well as not in the cellar. The household contents insurance of the landlord would not step in in case of theft of the objects of the tenant and with flooding by the way and an own household contents insurance, only because of the cellar, is not worthwhile for tenants on time (in contrast to the liability insurance, which is important for living on time). After all, the household contents, i.e. the entire furnishings, are the property of the landlord.

3.Is there enough Storage Space in furnished Flats for a certain Period of Time?

Storage space for clothing is always available in temporary flats. For larger apartments more, for smaller apartments less. Practically all apartments above a certain size have a wardrobe. Only in exceptional cases can you find a clothes rail. In larger flats there are often further clothes – or closets, sometimes also storerooms. These are particularly suitable for packing suitcases away. 4.
4 What should and what can I bring with me if I rent a furnished apartment for a limited period?

Temporary flats have everything you need for your daily life: Bed linen, towels, dishes, cutlery, pots, pans, kettles, toasters, tumble dryers, irons and ironing boards. Actually you don’t need to bring anything at all.

Our Tips:

Store your furniture and everything you don’t need immediately and organize your move only after you have found a permanent home.
Is there too little storage space in the apartment? Then it’s best to talk to the landlord. Many landlords are willing to buy additional furniture. However, this usually requires the tenant to rent the apartment for a longer period of time.
Do not bring your own furniture with you.

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