Austrian Court Rules Rental Losses as Hobby, Denies VAT Deductions for Taxpayer’s Property.

• The Austrian Federal Ministry of Finance posted a Federal Finance Court Decision on May 14.
• The decision clarifies the tax treatment of losses from small residential rental properties.
• An individual taxpayer purchased and rented out a residential property.
• The property suffered damage, leading to renovations and rental income decline.
• The taxpayer eventually sold the property and suffered losses.
• The Tax Office classified the rental activity as a hobby, denying VAT and income tax benefits.
• The taxpayer appealed the decision.
• The Federal Finance Court found the taxpayer did not show evidence of profit within 20 years.
• The activity was terminated for private reasons.
• The taxpayer was not entitled to input VAT deductions as the activity was a hobby.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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