Annex V in Accountable: A Step-by-Step Guide

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Annex V is part of your income tax return. It's used to report your private rental income (or leasing income, though we'll leave that term out going forward for readability) from properties that you own.

How do I enter the rental of a private property?

Go to "Additional Income" in your income tax return, then to "Private Rental" of a property.

Here you can enter your rented properties, provided they are your own property and located in Germany.

If you are married and indicated in your personal details in the income tax return that you are filing jointly, the checkbox for private property rental will be marked for both you and your spouse.

Address and square meters of the property in Germany:

Here you enter the address where the property is located.

The field "total living space" refers to the total area that is rented out. If you yourself live in the rented house/apartment, you must subtract this self-used area before entering the total living space!

The information on whether and what percentage of the property belongs to your spouse is important for the correct calculation in the income tax return. If the property belongs to both spouses, the share is stated in the notarized purchase contract.

If the property is rented as a vacation rental or short-term let (e.g., to contractors/tradespeople), select "Yes" for the question "Did you rent out this property as a vacation or short-term rental?"

For "Vacation/Short-term Rental," you enter the living space that was used for this type of rental.

Then you fill in the fields for the number of days you personally spent in this property during the entire tax year, the days the property was rented out, and the vacancy days.

If you rented through websites or online platforms (Airbnb, Wimdu, Booking.com, etc.), check the corresponding box. This is important because in this case, Annex V-FeWo (vacation rental supplement) must also be submitted.

Annex V-FeWo will be filled in automatically. It then looks like this in the income tax preview:

Please note:

Short-term (sub)letting of living and sleeping quarters is subject to VAT under Section 4 No. 12 Sentence 2 of the German VAT Act (UStG).

If you are a small business owner under Section 19 UStG, you are exempt from VAT and can report your income from short-term rental in your income tax return.

Currently, Accountable can only process VAT-exempt rentals.

Renting to Relatives

If the property, or part of it, was rented to relatives, this rental income is calculated separately. Relatives include, for example, children, grandchildren, grandparents, uncles, aunts, nephews, nieces, and cousins. The following are NOT considered relatives: spouses or registered civil partners, parents-in-law and children-in-law, and stepparents and stepchildren.

For "Did you rent this property or part of this property to relatives?" click "Yes."

Here you can enter the fields for the living space rented to relatives, as well as the total annual rent plus any collected additional (utility) costs and back payments or refunds for the previous year.

Regular Long-Term Rental (excluding rental to relatives)

If you have regular long-term rental, fill in the fields under "Rental or Lease Income for this Property (excluding rental to relatives)."

Here you enter the total sum for the entire year. For rental income, enter the income from rent.

If you have not agreed on separate advance payments for utility costs in the rental agreement, enter the total rental income including utility costs here, and enter €0 under "Income from Utility Costs (entire year)":

Income from utility costs can include, for example, water, general electricity, waste collection, heating, etc. This is usually listed in the standard rental agreement. See also here: https://deutscher-mieterbund.de/fileadmin/pdf/mietvertrag/Wohnungs-Mietvertrag_online.pdf

If you receive utility costs as separate advance payments, enter the net rental income in the first field, and in the field "Income from Utility Costs (entire year)," enter the total of the collected advance payments for utility costs.

In the field "Back Payments from or Refunds to Your Tenants," enter an amount if payments or refunds relating to the previous year were made during the assessment year. This can happen, for example, through the utility cost statement for 2025, which was prepared in summer 2026, and which showed that your tenants owe you an additional payment.

However, if you have to refund something to your tenants because the utility cost advance payments were too high, enter the amount here with a minus sign in front of it.

Expenses for Your Property

Among deductible expenses, depreciation comes first. It's often called "AfA" ("Absetzung für Abnutzung," depreciation for wear and tear). This means only items that wear out can be depreciated. In the case of real estate, this is the building. Land is not included in this calculation.

The basis for depreciation (AfA) is the acquisition costs and the date of purchase (if bought) or completion of the building (if newly built). These are entered here as a total sum.

The following count as acquisition costs, for example:

• Purchase price according to the notarized contract (building only)

• Notary costs (split between land and building)

• Broker's fees (split between land and building)

• Land registry and court costs (split between land and building)

• Real estate transfer tax (split between land and building)

• Travel expenses related to the purchase (round trip, including possible overnight accommodation and meal allowance costs)

• Costs for making the property ready for use (building only)

• Acquisition-related production costs, i.e., repair or modernization within the first three years after purchase. If these costs (excluding VAT) exceed 15% of the purchase price for the building, they can no longer be deducted directly as maintenance expenses but can only be depreciated via AfA.

Accountable only supports linear depreciation for building wear and tear.

How does depreciation work?

For the wear and tear of a building, you can depreciate between 2 and 3 percent for each full year. The actual percentage depends on the year of completion:

• 3% for buildings completed after December 31, 2022: this means just over 33 years

• 2% for buildings completed after December 31, 1924 and before January 1, 2023: i.e., 50 years

• 2.5% for buildings completed before January 1, 1925: i.e., 40 years

Other deductible expenses must be allocated, first between land and building, and if you yourself live in part of the rental property, your private share must be calculated out and deducted based on the square meters you use.

Loan Interest

Here you only enter the name of the lending institution and the interest paid. This means you cannot deduct the loan repayment installments from your taxes, only the interest you pay the bank for the loan.

Maintenance Costs

Maintenance costs are colloquially also called repairs. In tax terms, this is called maintenance expenses (Erhaltungsaufwand). This can be deducted directly from taxes up to €4,000 net per construction measure (e.g., house façade, doors, bathroom renovation, etc.) and does not flow into the AfA. This limit applies per measure per year.

If craftsman work was carried out in the apartment you yourself live in, as one of several units within the rental property, you cannot deduct these costs under Annex V, but only as a household-related service under "Additional Expenses - Expenses for Household-Related Services - Craftsman Services."

Property Management

If a property manager handles your property, prepares utility cost statements, etc., enter the total costs here for the property you are recording. If the management company manages several of your properties, you may need to split a combined invoice according to the individual properties.

Other Expenses

Under "Other Expenses," you can record expenses line by line. This means you enter the sum for the entire tax year in each line and specify beforehand what type of expense it is, e.g.:

• Tenant search: €800

• Tax advisor (only for the rental area): €500

• Membership fees for a homeowners' association: €250

By clicking "Add Expense," you can add new lines:

Multiple Properties

If you have multiple rental properties, add a new form for each one. Simply click "Add Another Property" and you can begin entering data for a different property.

If you have any questions about this, feel free to reach out to our tax coaches at any time.

Author - Valesca Wilms

As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.

Who is Valesca ?