Input Tax Deduction Disputes in Renovating Listed Buildings: BFH Ruling on Rental Intent Evidence

• The case concerns the right to deduct input VAT during the renovation of a listed property, specifically a castle.
• The taxpayer planned to use most of the castle for taxable business purposes (e.g., as a guesthouse) and a smaller part for private use.
• The tax office denied the input VAT deduction, claiming the renovation was for private reasons, but the Federal Fiscal Court (BFH) generally recognized the right to deduct input VAT.
• The BFH emphasized that the intention to rent must be proven with evidence, ideally from the start of construction; later events are only indicative, not proof.
• Delays in renovation do not automatically negate rental intent, but the owner must act promptly to make the property rentable; unjustified delays can cast doubt on the rental intention and threaten the VAT deduction.

Source: nwb-experten-blog.de

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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