Furnishing surcharge – local rent

If at the beginning of the

of a tenancy, furnishings in the rented apartment are regularly also rented. This may include, for example, living room or dining room furnishings, cabinets, carpets, but also built-in kitchens, refrigerators or washing machines. For this furnished rented apartment, the customary local rent can regularly be increased by a furnishing surcharge due to the increased value of use.

Meaning can this furnishing surcharge

also receive tax relief if a (partially) furnished apartment is left at a discount, e.g. to a relative. This is because in this case the income-related expenses can only be deducted in full if the rent paid is at least 66% of the comparative rent. The furnishing surcharge shall then be included in the local market rent within the meaning of Section 21 para. 2 EStG to be taken into account. This may result in the rent paid not reaching the 66% tax threshold for recognition of the full income-related expense deduction.

The Federal Fiscal Court

has clarified in a recent decision that a furnishing supplement is (only) to be taken into account if it can be determined from the local rent index or from supplements that can be realized on the market; a determination in any other way is out of the question.

If, for example, the rent index provides for a percentage surcharge or an increase via a points system for a fitted kitchen provided, this increase is to be regarded as customary in the market in the opinion of the court. If the rent index does not provide any corresponding indications and if a furnishing surcharge that can be realized on the local market cannot be determined, the local rent without surcharge shall be decisive.

(Further comments & information on this can be found in our information letter 09/2018 under the point 2.)