Every homeowner knows how quickly damage can occur to their home. Homeowners insurance is therefore essential.
Homeowners insurance is property insurance that you need as the owner of residential property. It doesn’t matter whether you live in the house yourself or rent it out. If you use a residential building privately, you cannot deduct this insurance from your taxes. However, there is a way you can save money when renting out.
If you own residential property, you need building insurance. This covers damage to buildings caused by storms, fire, hail or tap water. You can also insure against other types of damage, such as natural disasters.
As a policyholder, you will ask yourself whether building insurance is tax deductible. If you use your residential property yourself, you will not benefit from any tax advantages. It is not tax deductible for properties you live in yourself. You cannot claim building insurance on your tax return if you rent out the property either.
Homeowners insurance is property insurance and therefore not tax deductible if you use a building privately. It is not intended for personal provision. However, premiums for insurance policies that serve as personal provision are tax deductible, for example:
If you rent out residential property, you need building insurance, but you cannot deduct the premiums from your taxes. However, you can pass the costs of the insurance on to the tenants. According to paragraph 2 of the Operating Costs Ordinance, you can pass the building insurance on to the tenants in the utility bill under “operating costs from renting and leasing”. Your tenants must accept this cost transfer.
However, you should ensure transparency and explicitly inform tenants about the building insurance. The policy must be in line with the tenants’ interests.
There is an exception where you can deduct building insurance from your taxes. If you have a home office in the building you live in or use several rooms for work, you can claim the cost of building insurance as a proportion of your taxes.
However, these must be clearly defined rooms that can be used for work and that you actually use for work. It is not enough to just set up a work corner in the living room. The contribution you can claim depends on the size of the rooms. The relevant factor is what proportion of the total living space these rooms represent.
If you are an employee and use a home office for work, enter the costs for the building insurance as business expenses in your tax return. If you are self-employed, claim the costs for the building insurance as business expenses. In order for the costs to be recognized by the tax office, you must submit the following together with your tax return:
If you rent out a residential building or rooms in it for commercial purposes, you can claim the costs in Appendix V of your tax return. These are business expenses for renting and leasing. You must offset the income generated from renting.
