Newly built apartment balcony in quiet Gneixendorf

Brief information for busy readers with a sense for beauty

Price for investors 229.000,-- +20 % VAT; price for owner-occupiers 249.000,--

A new building in solid construction, built with attention to detail. On the 1st floor you will find approximately 64 m² of living space, which is divided into a bright, open living-dining-kitchen area, a bedroom, a bathroom, a WC, a storage room, and an inviting entrance hall. From the balcony you can enjoy the view of the quiet, rural surroundings – a place to catch your breath and linger. Built by regional craftspeople, the apartment impresses with high-quality materials: parquet floors, tiles, underfloor heating, and an energy-efficient air source heat pump. Optionally you can purchase a covered parking space for € 15.000 or a free parking space for € 10.000. The displayed images may be digitally enhanced or virtually staged. The shown furnishings are not included in the purchase price.

Tax advantages of Vorsorge apartments and the formula and steps to calculate the yield

When purchasing a Vorsorge apartment for rent, the buyer is treated for tax purposes as an entrepreneur. Therefore the paid value-added tax on the purchase can be reclaimed as input tax from the tax office. Savings approx. € 20.000–60.000, also the VAT on ongoing costs (repairs, administration, operating costs, tax advice etc.) can be claimed as input tax.

Although renting is subject to VAT, the advantages of the input tax deduction clearly outweigh this.

The rental income is subject to income tax, but can be significantly reduced by:

• Depreciation of the property: 1.5 % annually (on the building value)
• Depreciation of the furnishings (e.g., kitchen) over 10 years
• Deduction of ongoing costs such as repairs, administration, tax advice
• Deduction of interest on debt financing

The tax advantage of Vorsorge apartments arises not only from the input tax deduction but also from the ongoing depreciation and deductible costs.

Difference between gross and net yield

Gross yield:

To determine gross yield for the calculation of gross yield: monthly cold rent x 12 months = annual net cold rent = gross yield

Gross yield: annual net rent / purchase price excluding incidental costs = gross yield

Net yield: determine net income and purchase-related costs to calculate net yield

Annual net cold rent minus:

Maintenance costs (maintenance reserve, repair costs, property management fees 5% - 10% of the annual net cold rent for new buildings, otherwise more) Vacancy risk (vacancy, arrears… 5% in good locations) (Assumed total maintenance costs and vacancy risk 10% of annual net rent) Annual net rent - 10% = net income

Determine purchase-related costs:

Real estate transfer tax, notary and land registry costs, broker's commission… about 10%

Calculate total investment:

Purchase price + ancillary purchase costs 10%

Calculate net yield:

(Net income / total investment) x 100 = net yield in %.