> For the complete documentation index, see [llms.txt](https://help.immodio.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.immodio.app/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10107500-schuldzinsen-zinsen-fuer-bankdarlehen-darlehen-kredit.md). # Debt interest, interest on bank loans and credit Help on the Immodio entry item Debt interest, interest on a bank loan, loan or credit.
You use this category for **interest that you pay on a loan or credit** where the money borrowed was actually used for your letting activity. Typical cases are, for example, loans to finance: * buying a let property, * buying let land, * building a building intended for letting, * modernising or refurbishing a let property, * larger repairs, * or refinancing an existing property loan. Under Section 9 EStG, debt interest can be taken into account as income-related expenditure as far as it is **economically connected** with income from letting and leasing. What is decisive, therefore, is in particular **what the loan funds were actually used for**. #### **This category is only for the interest element** With an ordinary property loan the monthly instalment regularly consists of: * **interest** * and **repayment of capital** {% hint style="warning" %} Only the **interest element** belongs in this category. The capital repayment element is posted to the category "[Repayment or redemption of a bank loan, loan or credit](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10121600-tilgung-rueckzahlung-eines-bankdarlehens-darlehens-kredits.md)". {% endhint %} **Example** Monthly loan instalment: **€1,500** Of that, according to the bank's statement: * **€500 interest** * **€1,000 capital repayment** You then post only the **€500** to the **"**[Debt interest, interest on a bank loan, loan or credit](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10107500-schuldzinsen-zinsen-fuer-bankdarlehen-darlehen-kredit.md)**"** category\*\*.\*\* The **€1,000** of capital repayment is not debt interest and may not additionally be treated as income-related expenditure. It is posted to the category "[Repayment or redemption of a bank loan, loan or credit](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10121600-tilgung-rueckzahlung-eines-bankdarlehens-darlehens-kredits.md)". #### **What is decisive is what the loan was actually used for** For income-related expenditure to be deductible it is not sufficient that a loan is, for example, **secured** on a let property. What is decisive is the actual **use of the loan**. **Example: a loan for a let apartment** You take out a loan of **€300,000** and use the amount in full to buy an apartment that is then let. The debt interest arising on it is in principle connected directly with your letting income and can be posted to this category. **Example: a land charge on the let property but the money used privately** You already own a let property. The bank grants you a credit of **€50,000** and has a land charge registered on the let property as security. You use the **€50,000** in full, however, to buy a **private** car. The debt interest arising on it is therefore **not** connected directly with your letting income and **cannot** be posted to this category. The fact that the let property serves as security does not turn the credit interest into income-related expenditure of the letting activity. What is relevant is the **actual use of the money**. #### **A property partly let and partly used by yourself** Where a property is partly let and partly used privately, the debt interest may **not** be attributed in full to the letting activity. **Example** You buy a two-family house. One apartment is let, the other you use yourself. The loan finances the whole property without the financing having been clearly attributed to individual parts of the building. In principle only the debt interest attributable to the let part is then deductible as income-related expenditure. #### **Refinancing or a follow-on loan** Where the fixed-interest period of your property loan expires and you replace it with a new loan, the interest on the new loan can also continue to be connected with your letting activity. **Example** Outstanding balance of the original letting loan: **€200,000** For the follow-on financing you take out a new loan of **€200,000** and use it exclusively to redeem the previous loan. The economic connection with the let property then in principle continues to exist. The Federal Fiscal Court likewise recognises that the debt interest on a refinancing loan can continue to be connected with the letting income where it is used to redeem the previous letting loan. {% hint style="info" %} Where, by contrast, you additionally borrow money for private purposes on the refinancing, that additional private financing element has to be separated accordingly. {% endhint %} #### **Post taking out the loan and the debt interest separately** The payout of the credit itself is **not interest income and not rental income**. For example: The bank pays out a **loan of €300,000** to you. This loan payout belongs in the corresponding category **"**[Taking out a bank loan, loan or credit](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10012300-aufnahme-eines-bankdarlehens-darlehens-kredits.md)**"**. Where you then pay, for example, **€600 of interest** each month, only that **€600** belongs in the **"**[Debt interest, interest on a bank loan, loan or credit](/en/anleitung/einnahmen-und-ausgaben/buchhaltung-erweiterung/10107500-schuldzinsen-zinsen-fuer-bankdarlehen-darlehen-kredit.md)**"** category That keeps **taking out the loan** and the **running interest costs** cleanly separated from each other. #### **After selling a property, debt interest can remain deductible in particular cases** Where you sell a let property, the deduction of the loan interest as income-related expenditure does not in every case end automatically on the day of the sale. An important case is an outstanding balance remaining on a sale. **Example** * The outstanding balance on your property is: **€250,000** * Remaining sale proceeds that can be used for repayment: **€220,000** * Remaining loan: **€30,000** Where the disposal proceeds are not sufficient to repay in full the loan originally taken out for the let property, the interest on the remaining part of the loan can in principle continue to be taken into account as **subsequent income-related expenditure**. #### **Interest on private credit does not belong here** Interest on credit used, for example, for the following does not belong in this category: * a private car, * a holiday trip, * private home furnishings, * private living, * a property used by yourself, * other private purchases. That applies even where the credit is with the same bank as your property loan or was secured on a let property. #### **Assignment in Immodio** With this category the assignment is to the **owner**. Select the owner whose letting activity the loan concerned is actually attributable to. #### **Do not recover from the tenant** Debt interest for financing a property is the **owner's financing cost** and not recoverable operating costs. The **"Recoverable in the operating cost statement" switch therefore has to stay disabled**. Keep in particular the **loan agreement, the annual interest certificates or bank statements, the repayment schedule and evidence of the actual use of the loan funds**. With several credits or a property used for mixed purposes in particular, it should remain clearly comprehensible later **which loan actually financed which letting-related expenditure**.