Laws repair expenses for landlords

Income Tax: Even with the forthcoming Finance Act of the Ministry will respond to a recently announced decision of the Constitutional Court.

Print Send Text Size AAA pinboard Comment From the Archive: Tax Lesson for the coalition (11/21/2010) From the Economics and Business Administration of the Constitutional Court (11/14/2010) Constitutional Court: foundations pay little tax on real estate (15.10.2010) charged with tax losses: Supreme Court reviewed Suspension (25/04/2010) Vienna. The Ministry of Finance selects the tax allowance for large expenditures by landlords a relatively small solution. Even with the forthcoming Finance Act of the ministry intends to respond to a recently announced decision of the Constitutional Court (G35/10, right panorama from November 22). The Constitutional Court has the current ban on carrying forward of losses other than business income, effective on December 31, 2011 as irrelevant and thus repealed equal unconstitutional. If the coalition tomorrow brings the Finance Act as a government bill on the way, but it is not open to losses carried forward for rental and leasing, but create a different way to distribute high expenses of a period over a longer period of time. Owners who have demolition costs in one year high "negative income" can divide these costs in the future such as for repair and maintenance work (according to § 28 Income Tax Act) to ten years.



Non-earned money taxed
The reason for the Constitutional Court decision was a taxpayer, who had suffered because of the cost of a house demolition in a year's heavy losses from rental and leasing, could compensate for this small but only in part with revenue of that year. In subsequent years, they had to pay taxes for an income, she has achieved not expecting for a long time. For the Income Tax Act includes (in § 18 / 6) from a loss carried forward at the off-the types of income, in addition to the income from renting and leasing those from self-employment, investment income and "other income".

The Constitutional Court has marked his decision in the now proposed solution to the already unconstitutional. It noted, namely, that § 28 of the Income Tax Act in its current form "for income from rental and lease contains a sufficiently adapted to the system of losses. Only if this were the case, but the doubts were gone in check drawn against the norm. "

Especially in relation to the demolition costs, the proposed solution is not so objectionable. The loss brought forward would be compared to the distribution the more flexible instrument: it is not time-limited (except for cash-based computers: you have only three years), and depending on the amount of income, the losses each year are recycled in different amounts ( to the limit of 75% of the revenues, so in any case remain 25% tax).

By the legislature should leave the carry-forward, he avoids it to open the Pandora's box. He would have to lay down generally, the conditions under which non-operating losses in the types of income are carried forward.