Mileage Allowance (Construction)

Mileage allowance (construction) refers, in a tax context, to the option of deducting travel expenses between one’s residence and a property (e.g., a rental property, a construction site, or a plot of land) as a lump sum under income-related expenses or business expenses. The mileage allowance is currently €0.30 per kilometer (€0.38 from the 21st kilometer onward) for each workday or relevant trip. In the real estate sector, this applies in particular to landlords who regularly visit their property, as well as owners who are renovating or building a property themselves.

Tax Basis and Scope of Application

Landlords can deduct trips to their rented property (viewings, repair appointments, tenant visits) as income-related expenses against income from renting and leasing (Section 21 EStG). The mileage allowance of €0.30 per kilometer applies to the one-way distance-not the round trip. However, those who drive their own vehicle for a commercial property or as part of commercial construction activities may alternatively claim either the actual vehicle costs or the flat-rate amounts (€0.30 per kilometer driven for the total distance).

Difference Between the Mileage Allowance and Travel Expense Reimbursement

The distance allowance applies to regular trips between one’s residence and a fixed primary place of business (or one’s own property for owner-occupiers). The travel expense allowance (€0.30 per kilometer driven for the round trip) applies to business trips outside the primary place of business. For landlords with multiple properties, trips to each individual property are each considered a travel expense trip-so €0.30 per km of the total distance (round trip) is deductible, which represents a significant tax advantage for properties located far apart.

Calculation Example: Tax Savings Through Travel Expense Deduction

A landlord from Erlangen drives four times a month to his rental apartment in Nuremberg (distance 30 km each way). When claimed as a travel expense (round trip = 60 km per trip × €0.30 = €18 per trip), this results in annual deductible travel expenses of €18 × 48 trips = €864 in income-related expenses. At a personal tax rate of 35%, this results in annual tax savings of approximately €302. Anyone who incurs additional costs for parking fees, tolls, or public transportation can also claim these in full.

Travel costs add up more quickly for renovation projects: If you visit the construction site three times a week during a three-month renovation, that amounts to over 35 trips-at a distance of 30 km and a total cost of €18 per trip, this alone results in over €630 in deductible expenses for this renovation period.

Proof and Documentation

The tax office may require proof similar to a logbook for frequent travel expense deductions. For landlords, it is recommended to keep a simple record of all trips to the property: date, reason, distance (kilometers), vehicle. Alternatively, a logbook can be maintained. Without proof, the tax office may reduce the claimed travel expenses or disallow them entirely.

A simple spreadsheet is sufficient for documentation-consistency is key. Those who keep calendar entries with the reason and address can use these as proof in case of doubt. Bank statements with gas station transactions or toll receipts are useful additions to the documentation.

Practical Tip for Property Owners in Nuremberg and Franconia

Landlords in Nuremberg and Franconia who manage their properties themselves and visit them regularly should consistently document all trips. Those who manage a Nuremberg property from another location in Bavaria or Germany can claim significant income-related expenses through travel costs. Especially during renovation projects, where numerous site visits are required, the deductible amounts add up quickly.

For owners with multiple properties in the metropolitan region, we recommend breaking down all trips by property. This not only simplifies the tax return but also helps determine the actual administrative costs per property-useful information when deciding whether professional property management would make economic sense. We recommend coordinating all travel-related business expenses with your tax advisor.

Frequently Asked Questions

As an owner-occupier, can I deduct travel expenses to my own construction site?

No. For owner-occupied properties, travel expenses to the construction site are generally not tax-deductible, as no taxable income is generated. An exception applies if the property is intended for future rental or commercial use-in this case, anticipated income-related expenses or business expenses may be claimed.

Can I deduct actual vehicle costs instead of the flat rate?

Yes. If the actual vehicle costs (fuel, insurance, depreciation, maintenance) are allocated proportionally to trips to the property, they can be claimed in full. This is worthwhile if the vehicle is driven infrequently and the actual cost per kilometer exceeds €0.30.

Does the mileage allowance also apply to trains or other modes of transportation?

The mileage allowance applies to trips made in your own car. For trips taken using public transportation, the actual ticket costs can be claimed as income-related expenses, provided they are related to the rented property.

How many property visits per year are tax-deductible?

There is no legal upper limit on the number of deductible trips. However, the tax office checks for plausibility: Someone managing a condominium with a stable long-term tenant will hardly be able to justify 100 trips per year to the property. On the other hand, someone who manages a multi-unit building themselves, coordinates contractors, and conducts viewings of vacant units can plausibly document 50-80 trips per year. The reason for the trip should always be documented.

Can travel expenses also be deducted for trips to the property management company or the notary?

Yes. Not only trips directly to the property, but also trips to appointments related to the rented property are deductible. This includes trips to the property management company, the notary (for the purchase agreement or land registry entry), the tax advisor (to the extent that real estate is involved), the bank (financing discussions for the property), or government agencies (building authority, tax office). In all these cases, either the actual ticket costs (public transportation) or the mileage allowance can be claimed. It is important to document the reason for the trip-“Appointment at the Nuremberg-North Tax Office regarding the settlement of rental property at Musterstraße 5” is sufficient as proof.

Mileage Allowance in the Context of Other Income-Related Expenses for Rental Income

Travel expenses are just one of several types of income-related expenses for rental income. They should be recorded together with administrative costs, maintenance expenses, financing interest, depreciation, and insurance premiums to obtain a complete tax picture. Overall, income-related expenses can significantly reduce the tax burden on rental income. Those who rent out a property in Nuremberg and live in the region themselves generally have manageable travel expense deductions. In contrast, those who manage a Nuremberg property as a non-resident owner-for example, from Munich or Frankfurt-can incur significant income-related expenses due to the long travel distances. In such cases, it is worth considering whether hiring a local property management company is more cost-effective than regularly enduring long commutes.

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