WEG and Hausgeld — what's deductible and when (German rental)

1. Hausgeld is not a single deductible expense

You pay a fixed monthly Hausgeld (HOA fee) to your Wohnungseigentümergemeinschaft or WEG (homeowners' association). You cannot simply multiply this monthly fee by 12 and deduct the total as Werbungskosten (deductible expenses) under §9 EStG. The German tax system requires you to split this payment. The property manager calculates the required monthly amount based on the approved annual budget. They collect the funds to keep the building financially solvent. The monthly payment is an advance. It divides into two distinct categories. One part pays for immediate running costs like water, trash collection, hallway electricity, and the property manager's fee. The other part goes into the Erhaltungsrücklage (maintenance reserve). They hold the maintenance reserve in a separate trust account to protect it from bankruptcy. The Finanzamt (tax office) treats these two parts differently. You deduct the running costs in the year you pay them. You cannot deduct the reserve contributions when you pay them to the WEG. You only deduct reserve funds when the WEG actually spends them on a contractor. The law strictly separates these two pools of money. To find the exact split, you must wait for the property manager to send the Hausgeldabrechnung (annual statement). This document arrives in the spring or summer of the following year. You absolutely need it to file your Anlage V (rental income schedule). You cannot file an accurate return using just your bank statements. The tax office routinely rejects tax returns that simply claim 12 months of flat Hausgeld payments.

2. Running costs versus the maintenance reserve

Your WEG manages the building collectively. It collects Hausgeld to keep the property functioning and legally compliant. The property manager cannot use reserve funds to pay for regular utilities or cleaning. The building requires a steady cash flow for daily operations. Running costs include utilities, building insurance, stairwell cleaning, winter snow clearance, and the Verwaltergebühr (property management fee). These are standard Werbungskosten under §9 EStG. Because German tax law operates under the Zufluss-Abfluss-Prinzip (cash accounting principle) defined in §11 EStG, you deduct these costs in the year the cash leaves your personal bank account. You pay these costs directly through your monthly advances. The Erhaltungsrücklage is entirely different. It is a mandatory savings account for future capital expenditures like roof repairs, facade painting, or heating system replacements. When you transfer money into this reserve, the cash just moves from your personal bank account to a collective WEG bank account. You still own your proportional share of that money. The cash has not left your legal possession. Because no actual external expense has occurred yet, the tax office denies an immediate deduction. The cash must leave the WEG ecosystem and go to a third-party business to count as an expense. Until that happens, your reserve contributions are legally classified as an asset transfer, not an expense. This distinction trips up many foreign landlords who assume any cash leaving their local checking account counts as a tax deduction.

3. When the maintenance reserve becomes deductible

The money sitting in the Erhaltungsrücklage remains your asset. It becomes a deductible Werbungskosten only in the year the WEG pays a contractor for a repair. You must wait for the actual invoice date to claim the expense. The tax office demands strict proof of this external outflow. If the WEG replaces the central heating in November 2024 using 40 000 € from the reserve, and your ownership share (Miteigentumsanteil) is 2 %, your specific share of the cost is 800 €. You deduct this 800 € on your 2024 tax return. The WEG acts as your agent, spending your money on your behalf. It does not matter when you paid your cash into the reserve. You might have built up that 800 € share slowly over five years of monthly Hausgeld payments. The deduction triggers strictly on the date the WEG pays the invoice, as dictated by §11 Abs. 2 EStG. The historical origin of the funds is irrelevant to the tax office. Your property manager tracks these external outflows. The annual Hausgeldabrechnung includes a specific section detailing your share of the reserve spent on maintenance during that calendar year. This is the precise figure you declare to the tax office, replacing your actual monthly reserve contributions for tax purposes. If the WEG spends nothing from the reserve in a given year, your deduction for reserve spending is exactly zero.

4. How to read the annual Hausgeldabrechnung

Property managers typically issue the Hausgeldabrechnung between May and July of the year following the tax year. You must have this document to file your taxes correctly. The property management company usually presents this document at the annual owners' meeting. You review the numbers and vote to approve the settlement. The document contains three critical numbers for your Anlage V. First, the total running costs allocated to your specific unit. Second, your share of the Erhaltungsrücklage actually spent on repairs during the year. Third, the Verwaltergebühr. You must locate these three numbers among the pages of accounting data. Many professional property managers include a separate summary page titled Bescheinigung für die Steuererklärung (tax certificate). This page isolates the exact deductible amounts and often references the specific tax lines. If you have this page, it saves you from digging through the multi-page accounting breakdown. It translates the internal WEG accounting into standard tax logic. Never use the Wirtschaftsplan (budget) to file your taxes. The budget is merely an estimate for the upcoming year. The Finanzamt requires the Hausgeldabrechnung, which proves the actual historical cash flows. Submitting budget numbers triggers an inquiry and delays your tax assessment. If your property manager misses the standard 31 July tax filing deadline, you request a deadline extension (Fristverlängerung) via ELSTER.

5. Handling the year-end Nachzahlung or Erstattung

Your monthly Hausgeld payments are estimates. At the end of the year, the Hausgeldabrechnung compares your total advance payments against the actual costs incurred by the building. The property manager calculates the difference down to the cent. If actual costs exceeded your advances, you face a Nachzahlung (additional payment). If your advances were higher than the costs, you receive an Erstattung (refund). The WEG usually debits or credits your bank account a few weeks after the owners approve the annual statement. Under the cash accounting rules of §11 EStG, you declare these adjustments in the year they physically occur. If the 2024 statement arrives in June 2025 and requires a 300 € Nachzahlung, you pay it in 2025. You deduct that 300 € on your 2025 tax return, not your 2024 return. This rolling adjustment system ensures you never claim money you did not actually spend. Conversely, if you receive a 200 € Erstattung in August 2025 for overpaid 2024 costs, you declare it as negative expenses or additional Mieteinnahmen (rental income) on your 2025 return. You do not go back and amend the 2024 return. The tax system strictly follows the date the money hits or leaves your bank account. Your 2025 tax return contains a mix of 2025 running costs and the final settlement adjustments from the 2024 accounting year.

6. Special levies for major repairs

Sometimes the Erhaltungsrücklage lacks the funds for a major, urgent repair. In this case, the WEG votes for a Sonderumlage (special levy) to raise the necessary cash quickly. The property manager usually issues a separate resolution document detailing the exact purpose of the levy. You keep this document in your tax files as proof. A Sonderumlage operates under the exact same legal logic as the regular maintenance reserve. Paying the special levy into the WEG account does not immediately trigger a tax deduction. The deduction only occurs when the WEG pays the external contractor. The money remains your asset while it sits in the WEG account. Usually, the WEG collects the Sonderumlage specifically to pay an impending invoice. Because of this tight timeline, the payment into the WEG and the WEG's payment to the contractor often happen in the exact same calendar year. In this scenario, your tax deduction aligns perfectly with your cash outflow. Timing mismatches do happen. If the WEG collects the special levy in December 2024 but pays the roofing company in February 2025, you claim the deduction on your 2025 tax return. You cannot claim it in 2024. The property manager includes this 2025 outflow in the tax certificate for the 2025 calendar year, ensuring you have the correct documentation to prove the deduction to the tax office.

7. The 15 percent rule for new owners

If you recently bought the property, major WEG repairs trigger the strict rule in §6 Abs. 1 Nr. 1a EStG. This article defines anschaffungsnaher Herstellungsaufwand (acquisition-related manufacturing costs). This rule prevents buyers from purchasing a dilapidated building and immediately writing off massive renovation costs against their regular income. The tax office scrutinizes the first three years heavily. If you renovate or repair the property within the first three years of ownership, and the total costs excluding VAT exceed 15 % of the Gebäudeanteil (building value), you lose the right to deduct the costs immediately. You must separate the building value from the Grund-und-Boden (land value) using the Bodenrichtwert (standard land value) to find your exact limit. Instead, the tax office adds these costs to your original purchase price. You recover them slowly through your annual AfA (depreciation), typically at 2.0 % or 3.0 % per year (§7 Abs. 4 EStG). This drastically reduces your immediate tax shield. This 15 % limit applies to your share of WEG repairs paid from the Erhaltungsrücklage or a Sonderumlage. If the WEG installs a new elevator and your share pushes your personal three-year repair total over the 15 % threshold, you forfeit the immediate Werbungskosten deduction. You track WEG expenditures closely during your first 36 months of ownership. If you breach the limit, the tax office retroactively cancels the deductions you claimed in years one and two.

8. Mapping Hausgeld to the 2025 Anlage V

The 2025 Anlage V splits WEG-related deductions across three distinct blocks. You never enter a single lump-sum Hausgeld figure. You extract each category from the annual Hausgeldabrechnung (or the property manager's separate Bescheinigung für die Steuererklärung) and place each one into its own block. Getting this mapping right prevents automated ELSTER errors and avoids a tax clerk misclassifying your deductions. If you use Anlage V Easy, the software routes each category to the correct Zeile automatically and you prepare your German rental tax report from abroad in 10 minutes for 79 €.

• Zeilen 73–75 | Umgelegte Kosten | Running costs you charge the tenant via Nebenkostenabrechnung: water, heating, garbage, building insurance, Hauswart, cleaning
• Zeilen 76–78 | Nicht umgelegte Kosten | Hausverwaltung (property management fee) and bank/account fees you bear alone — Erhaltungsrücklage contributions do NOT go here
• Zeilen 55–56 | Erhaltungsaufwand (voll) | Your share of the reserve actually spent on repairs during 2025 — deducted in full this year

9. Example one: Calculating the deduction for a typical year

You own an apartment in Berlin. Your monthly Hausgeld is 300 €, totaling 3 600 € paid in 2024. You transfer this money every month from your checking account to the property manager. You wait until the following summer to determine your actual tax deduction. In June 2025, you receive the 2024 Hausgeldabrechnung. The statement shows the property manager allocated 2 400 € of your payments to immediate running costs and 1 200 € to the Erhaltungsrücklage. The statement clearly separates these two financial streams. The statement also shows the WEG spent money from the reserve to fix a broken hallway window. Your proportional share of that specific repair invoice is 80 €. This is the only external maintenance expense for the entire calendar year. For your 2024 Anlage V, your deductible Werbungskosten from the WEG total 2 480 €. This consists of the 2 400 € in running costs plus the 80 € reserve expenditure. The remaining 1 120 € you paid into the reserve sits in the WEG bank account and is not yet deductible. If your taxable rental profit was 10 000 € before this deduction, it becomes 7 520 €. Non-residents face progressive tax rates starting at 14 % under §49 Abs. 1 Nr. 6 EStG. At a typical 30 % marginal bracket, this 2 480 € deduction reduces your final German tax bill by 744 €. You do not lose the remaining 1 120 €; it simply waits in the reserve until the WEG needs it for future capital repairs.

10. Example two: Calculating the deduction with a major facade repair

You own a Munich apartment. The building value (Gebäudeanteil) is 200 000 €. You have owned it for five years, so the strict 15 % rule (§6 Abs. 1 Nr. 1a EStG) no longer applies to your property. You are free to deduct major repairs immediately. The WEG decides to paint the facade and upgrade the balconies in 2024. The total cost is 100 000 €. Your share is 5 %, which equals 5 000 €. The WEG pays the contractor in October 2024 entirely from the accumulated Erhaltungsrücklage. The project finishes smoothly before the winter. You did not pay any extra cash in 2024. The money was already sitting in the reserve from years of your monthly savings. Because the cash left the WEG account and paid a third-party contractor in 2024, you deduct the full 5 000 € on your 2024 tax return. The historical source of the cash does not limit your deduction. This creates a massive tax shield. If your gross Mieteinnahmen (rental income) is 12 000 € and your regular expenses like AfA and interest are 8 000 €, your profit is normally 4 000 €. The 5 000 € facade deduction pushes your taxable rental income to negative 1 000 €. You owe 0 € in income tax for this property in 2024. Furthermore, you generate a 1 000 € tax loss. Under German tax law, you carry this loss forward (Verlustvortrag) to offset your rental profits in 2025, further reducing your future tax burden. The tax office automatically applies this loss to your next assessment.