There is an obligation to include any property you own in your income tax return.
If you only have one property and it is your main residence, you only need to report it. However, if you have vacant or rented properties, you must include all income and expenses obtained from renting or selling them.
You need to distinguish:
- Vacant properties: a property income imputation must be declared, which is a percentage of the cadastral value or the purchase price in the country where the property is located.
- Rented properties: the income obtained is declared as real estate capital income. The tax authorities allow certain expenses to be deducted from this income (maintenance, repairs, local taxes). Additionally, it should be specified whether the rental is permanent or for vacation purposes.
- Property sales: a capital gain or loss must be declared depending on the purchase and sale value of the property. In this case, you can also include expenses related to the purchase/sale of the property.
Keep in mind that if the property is located abroad and is worth more than €50,000, you must submit Form 720.
It is also possible that you own a property but do not use it because another person (usually a family member) is living in it. In this case, the property will appear in your tax data as bare ownership, but it does not need to be included in your income tax return.
What must be distinguished is usufruct, which is the right allowing a person to use and enjoy a property owned by someone else.