Deducting Mortgage Interest for Rentals: What Your Loan Brings Fiscally

Yes. Interest on a loan used to buy or build a rented apartment is an income-related expense (§ 9 (1) sentence 3 no. 1 EStG), reported in 'Annex V' in the year of payment.

No. Repayment reduces your debt and is therefore not an expense. Only interest and other financing costs are deductible.

Yes. Notary and land registry costs for the land charge are loan procurement costs and immediately deductible. Contract and ownership transfer costs are acquisition costs and depreciated over time.

Yes, if it is at market rates. The tax authorities assume this for a discount of up to 5% and a fixed rate for at least five years. The deduction occurs in the year the loan is disbursed.

Yes, as income-related expenses in the year of payment. This also applies during the construction phase before rent is received, provided you intend to rent the property long-term.

It depends on the reason. For refinancing while keeping the property as a rental, yes. For selling the property, no; it then counts as a selling cost.

Yes, if the sale proceeds are insufficient to repay the loan and you use all proceeds for repayment. The interest on the remaining debt remains deductible, even after a tax-free sale.

As much as your tax rate on that amount. At €90,000 income, including the solidarity surcharge, that's about 47 cents per euro of interest. The rest remains your out-of-pocket expense.