Last Updated on September 29, 2023 by Kristina Valcheva
Owning a property is one of the largest investments you’ll ever make and it’s a huge financial responsibility.
As with any investment, you need to know how to get the most out of it. Knowing the tax credits and tax deductions available to property can help you ensure your investment pays you back.
In this guide, we will outline some useful tax tips for property owners who want to save money and reduce their taxes.
#1 Stay organized
There are two reasons why you need to keep all of your documents. The first one is that you never know when you might get audited by the tax authorities. The second one is that if you keep a detailed record of all of your expenses, you won’t miss any deductions you are entitled to.
In case there is too much paperwork, consider hiring a tax professional specializing in real estate, who can help you and save you time, money, and stress.
To stay organized, you can scan and store your documents digitally as well. This way it will also be fast and easy to send them if you file your tax declaration online.
Keep in mind that in some cases, the tax officers will go as far back as 6 years when reviewing your tax situation. That’s why it is so important to keep all of your documents safe.
#2 Identify your deductible expenses
Deductions can help you reduce your taxable income. It’s a good idea to have a good understanding of your tax entitlements (depending on the country you live in) as it can help you save money.
Your taxable rental income is your total rental income minus your expenses. There are two types of property expenses – capital and current. Examples of current expenses are utility bills, repairs, and property management fees.
Meanwhile, capital expenses are considered long-term and include notary fees, furnishing, repairs, and improvements.
Many landlords have vacant properties due to COVID-19, and some have decided to renovate their homes while restrictions are in place. The cost of the renovation is considered capital in nature, which means that this may be tax-deductible.
You may also be interested in our Tax tips for landlords during the lockdown.
#3 Explore tax exemptions
You may not be aware of all of the tax exemptions that you are entitled to. These exemptions will depend on the country where your property is located.
For example, did you know that some US states offer tax exemptions to owners of historic buildings and for energy-efficient properties?
Learn more ideas from the Top Tips on reducing property income tax for overseas landlords we specially prepared for you.
#4 Hire a property management company
Hiring a professional property manager can help you increase your rental income by ensuring occupancy. Plus, your costs for travel will reduce.
They could also offer you tax tips that can save you even more money (depending on the country where your property is located). Management fees are deductible, which means fewer taxes for you.
#5 Don’t miss the deadline
The tax deadline is different for every country and it may vary slightly each year. Here are the tax deadlines for 2023:
Ireland –31 October 2023. The extended deadline is 16 November 2023. It is for taxpayers who file 2022 Form 11 income tax returns.
UK – The tax deadline in the UK for 2023 is 31 January 2023.
US – The tax deadline in the US is 18 April 2023.
Spain – The deadline in Spain for income tax returns is separated into 4 quarters. (20 April, 20 July, 20 October, and 20 January). Deemed tax returns for 2022 – 24 December 2023 for Income Tax Returns
Poland – The tax deadline in Poland is 2 May for Personal Income Tax Returns.
France – The tax deadline in France for Business Tax Returns is 18 May 2023 and 25 May for Personal Income Tax Returns.
Hungary – The tax deadline for Hungary is 22 May 2023.
Germany – The tax deadline in Germany for the 2022 tax return is October 2, 2023 (without a tax advisor) and 31 July 2023 (if you apply with a tax advisor). The German tax deadline for 2023, is 2 September 2024 (without a tax advisor) and 31 May 2025 (with a tax advisor).
If you submit your tax return later than this, you could be hit with fines or penalties.
#6 File your property tax return with PTI Returns
We know that dealing with the tax laws of a foreign country can be quite stressful and overwhelming.
At Property Tax International (PTI Returns) our team of tax experts specialize in international property tax returns and ancillary services for overseas property investors.
Why PTI Returns?
- PTI Returns is part of CluneTech (formerly known as Taxback Group), employing over 1,500 people in more than 20 countries worldwide. We have 20+ years of experience preparing both domestic and international tax returns for property owners
- We offer a comprehensive worldwide tax return service ensuring our clients are compliant in each relevant tax jurisdiction.
- Our team of tax experts can answer any of your international property tax-related questions and multilingual support is available via phone or email.
- We specialize in property tax and filed over 322,000 tax returns last year.
Why PTI Returns is better than a local accountant?
Here are some reasons why our clients owning real estate prefer PTI Returns instead of local accountants:
- Better value – we offer a more affordable service than your local accountant.
- One-stop shop – need to file tax documents in more than one jurisdiction? You can do it all online with PTI Returns! This is one of the most unique things that sets us apart from most accounting services.
- Tax specialists – We know international property tax! We guarantee to properly determine your residency status and apply every tax relief you’re entitled to.
- No language barrier – we speak our client’s language and communicate with the local tax authorities on their behalf, ensuring their forms are filed correctly.
- Local knowledge – we have offices all over the world. This enables us to have substantial local knowledge in every country and helps you to maximize your investment profit potential.
If you have any questions, you can request a free call from a tax expert. This is a no-obligation consultation.
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