Maximise your net rental income: The accurate calculator for rental income and additional costs
Did you know that according to experts, up to 90% of all utility bills contain errors? These inaccuracies cost landlords thousands of euros annually and lead to avoidable conflicts. An accurate calculator for rental income and utility costs is your essential tool for financial clarity.
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The topic briefly and concisely
Apportionable ancillary costs are clearly defined in the Operating Costs Ordinance (BetrKV); any deviation requires an explicit and legally secure regulation in the rental agreement.
Non-apportionable costs, such as maintenance and administration, can reduce your tax burden by up to 45% depending on your personal tax rate.
An incorrect or delayed utility bill (after the 12-month period) results in the loss of any claims for additional payment against the tenant.
Do you face the challenge of creating a legally compliant service charge settlement each year? The complexity of the German Operating Costs Ordinance (BetrKV) transforms this mandatory task into a minefield for many property owners. Incorrect allocation of cost points can reduce your return or even lead to legal disputes. This article shows you how to systematically distinguish between apportionable and non-apportionable costs, optimise your rental income for tax purposes, and ensure your economic efficiency sustainably using a digital approach. This way, you turn uncertainty into a data-driven strategy.
The Foundation of Your Return: Gross Rent vs. Net Rent
The correct differentiation of rental components is the first step towards profitability. The cold rent (net rent) is the pure compensation for room usage, while the warm rent also includes the advance payments for operating and heating costs. In Germany, the average additional costs in the third quarter of 2024 were approximately 2.94 euros per square meter. For an 80-square-meter apartment, this means a monthly advance payment of around 235 euros. Only ongoing costs are eligible for apportionment, which requires precise calculation. To avoid pitfalls, you should determine the local comparative rent and set your advance payments realistically. This precise separation is the basis for any further calculation and safeguards your income. Therefore, the exact definition of apportionable costs is crucial for your success.
Maximum allocation: You can claim these 17 additional costs
The Operational Costs Ordinance (BetrKV) is the legal basis that clearly defines which costs you are allowed to allocate to your tenants. Having an exact understanding of these items fully maximises your earning potential. A reference to § 2 BetrKV in the rental agreement is sufficient to validly allocate these costs. The most important allocable costs include:
Property Tax: This is levied by the municipality and can be fully allocated.
Water Supply and Wastewater: This includes the costs for fresh water as well as fees for sewage and stormwater.
Heating and Hot Water Costs: These must be billed based on consumption by 50 to 70 percent.
Lift: The operational and maintenance costs are also borne by ground floor tenants.
Street Cleaning and Waste Disposal: The fees charged by municipal services are a classic item.
Building Cleaning and Pest Control: Regular cleaning of staircases and communal areas.
Garden Maintenance: Costs for maintaining communal green spaces.
Lighting: Electricity for the stairwell, basement, and outside areas.
Chimney Cleaning: The fees for the chimney sweep are allocable.
Insurance: Property and liability insurance for the building.
Caretaker: The wage costs for the caretaker, excluding administrative and repair activities.
Communal Antenna or Cable Connection: The allocability of cable fees ends for existing contracts on 30 June 2024.
Other Operating Costs: These must be explicitly named in the rental agreement, such as the maintenance of smoke detectors.
A digital rental yield calculator helps you ensure none of these items are overlooked. Equally important is the knowledge of the costs that you as a landlord must bear.
Avoid cost traps: These expenses are not apportionable
The differentiation from non-apportionable costs protects you from legal disputes and financial losses. These expenses are part of your responsibility as an owner and must not appear in the service charge statement. These include all one-off costs as well as management and maintenance costs. A clear separation is essential.
Management costs: Expenses for property management, bank charges, postage and phone calls are not apportionable.
Maintenance and repair costs: The cost of repairing a faulty heating system or renovating a balcony falls to you as the landlord.
Maintenance reserve: The saving for future, major renovation measures is your entrepreneurial task. According to the Peters formula, approximately 1.5% of the construction costs should be set aside annually for this purpose.
One-off costs: The purchase of new rubbish bins or a one-time facade cleaning cannot be passed on to tenants.
Although these costs initially impact your liquidity, they offer significant potential for reducing your tax burden. Find out how you can allocate planned measures such as apportioning modernisation costs.
Tax Optimisation: Using business expenses to reduce your tax burden
Your non-deductible costs are a significant lever for increasing your net return. You can claim these as allowable expenses in the Anlage V of your tax return, thereby reducing your taxable income. The basic tax-free allowance in 2024 was 11,604 euros for singles; all income above this threshold will be taxed at your personal tax rate. Every euro of allowable expenses directly reduces your tax burden. This includes, for example, depreciation (AfA), loan interest, brokerage fees for letting, and the aforementioned maintenance costs. An example: With rental income of 15,000 euros and deductible costs of 4,000 euros, you only need to tax 11,000 euros. Are you unsure which costs you can claim? A conversation with a tax advisor or using a tool like our ImmoGPT chat can quickly clarify this. An accurate profitability calculation is key. However, correct calculation is only one half – formal submission is the other.
Form and Deadlines: Creating a Legally Compliant Service Charge Statement
Correctly handling service charge billing is crucial to enforce your claims. You must deliver the bill to your tenant no later than 12 months after the end of the billing period. If you miss this deadline, you can no longer demand additional payments, but must pay out any credit balance. The billing must be transparent and comprehensible for the tenant. It must necessarily contain the following points:
The exact billing period (maximum 12 months).
A breakdown of the total costs for each type of expense.
The specification and explanation of the distribution key used (e.g. living space).
The calculation of the portion attributable to the tenant.
The deduction of advance payments made.
Errors here can jeopardize the entire claim. The decision between making landlord decisions is fundamentally influenced by such details. A digital process can significantly reduce this complexity.
Conclusion: Using digital tools for maximum returns and legal security
A precise calculator for rental income and ancillary costs is more than just a calculation tool – it is a strategic instrument for maximising returns. Correctly distinguishing between allocable and non-allocable costs protects you from legal disputes and secures your claims. At the same time, you can turn non-allocable expenses into effective advertising costs that can reduce your tax burden by up to 45%. Compliance with formal criteria and deadlines is essential. Digital solutions like those from Auctoa help you automate these complex processes and make data-driven decisions. This creates transparency, increases your efficiency, and sustainably secures the economic success of your property. Use an Auctoa assessment to understand the full potential of your property.
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Additional useful links
The Federal Statistical Office offers a table on rents and household net income in Germany.
The page Gesetze im Internet provides the Operating Costs Ordinance (BetrKV) as a legal regulation for apportionable operating costs.
Wikipedia offers an article about the rental agreement in Germany, its components, and legal foundations.
The Federal Ministry of Finance provides information on the tax aspects of housing.
The Consumer Protection Agency informs about energy consulting and the service charge statement.
The Federal Ministry for Economic Affairs offers a dossier on the energy transition in the building sector.
The German Tenants' Association provides information and a service charge report.
The Deutsche Bundesbank presents an indicator system for the residential real estate market.
FAQ
What is the deadline for the service charge statement?
As a landlord, you have exactly 12 months after the end of the billing period (usually the calendar year) to prepare the statement and deliver it to the tenant. Therefore, for the 2024 billing period, the statement must be with the tenant by 31 December 2025.
What are 'other operating expenses'?
Under 'other operating costs' (§ 2 No. 17 BetrKV), costs are included that are not mentioned in the other 16 items, e.g., the maintenance of smoke detectors or the cleaning of gutters. These must be individually and explicitly listed in the rental agreement for a valid allocation.
Who pays the additional costs when a property is vacant?
You, as the landlord, must bear the ancillary costs associated with a vacant apartment yourself. They cannot be passed on to the other tenants of the building. An exception is made for consumption-based costs, which do not incur when the apartment is vacant anyway.
How can I tax rental income and what is the tax-free allowance?
Rental income must be declared in Appendix V of the income tax return. There is no specific allowance for rental income, but it falls under the general basic allowance (€11,604 for singles in 2024). If your total taxable income is below this, you will not pay any taxes.
Are repair costs apportionable service charges?
No, repair and maintenance costs are generally not transferable. They serve to maintain the value of your property and must be borne by you as the landlord. However, you can deduct these costs from tax as business expenses.
What is the difference between apportionable and non-apportionable additional costs?
Assignable ancillary costs are the ongoing, recurring expenses of building operations (e.g., water, property tax) that can be passed on to the tenant through the lease agreement. Non-assignable costs are expenses for administration, repairs, and one-off items that the landlord must bear themselves.
