Who Owns It, Who Owes It, Who Pays: Structuring for Couples

German income tax is strictly personal. Rental income and Werbungskosten belong to whoever holds civil-law title in the Grundbuch - not to whoever happened to pay.

The default: 50/50, both on everything

For a married couple filing Zusammenveranlagung the ownership split rarely changes this year's tax bill, since both halves land in the same joint return. What it changes is resilience: divorce, death, a switch to Einzelveranlagung, or one of you going self-employed. A 50/50 Miteigentum entry with both names on the loan holds up in all of those.

The Drittaufwand trap

Drittaufwand - third-party expenditure - is cost borne by someone other than the person earning the income, and it is not deductible. The classic failure: the flat is in one spouse's name alone, but the other spouse takes out and services the loan. Those Schuldzinsen vanish - the owner did not incur them, and the payer has no rental income to set them against.

What rescues it:

• Gesamtschuldnerische Haftung - both spouses jointly and severally liable on the loan (§ 421 BGB). Interest is then attributable to the owner-spouse even if the other pays it.
• A joint account (Oder-Konto): the BFH treats payments out of it as made by the owner, regardless of who fed the account.
• Abgekürzter Zahlungsweg - a third party settling the owner's own obligation is accepted. The abgekürzter Vertragsweg (a third party contracting in their own name) is far less reliable, and is genuinely unsettled for financing costs. Do not build a plan on it.

Practical rules

1. Both names in the Grundbuch, in a stated ratio.
2. Both names on the loan agreement as Gesamtschuldner.
3. Rent in and all costs out through one joint account.
4. If your ownership and payment ratios ever diverge, keep the paper trail consistent.

Not tax advice - settle the structure before the notary appointment, with a Steuerberater involved.