Verlustvortrag
Carrying a rental loss into later years.
A rental loss — common in the first years because of interest, acquisition-related costs and AfA — can reduce other German income of the same year. A non-resident usually has no other German income, so the loss is mostly carried back to the two previous years or forward without time limit under §10d EStG, and it reduces German rental profit later. The loss is only recorded if you file a return for the loss year; the Finanzamt then issues a separate notice on the remaining loss (Verlustfeststellungsbescheid). Skipping the return in a loss year is therefore costly. Your home country may treat the same loss differently — exempt, ignored or usable at home — depending on the treaty and its own rules.
Last reviewed: by Yann Lephay.