Overview

• The Federal Fiscal Court (BFH) ruled that landlords cannot deduct contributions to maintenance reserves as expenses until the money is used for actual repairs or upkeep.
• The case involved a landlord couple from Franconia who sought to deduct €1,326 paid into a maintenance reserve fund as advertising expenses on their tax return.
• The court maintained that contributions to maintenance reserves do not constitute immediate expenses but are instead akin to savings, which do not qualify for tax deductions.
• This decision has widespread implications for millions of property owners in Germany, particularly those in housing associations managing shared maintenance funds.
• The ruling aligns with existing legal precedents and confirms that tax deductions are only permissible when funds are spent directly on property maintenance.