For landlords, the issue of e-invoicing hinges on one question: whether to let property tax-free or to opt for VAT. This article explains what applies in both cases.

Introduction

If you let out property, you may be wondering whether e-invoicing applies to you. The answer depends on whether your letting is VAT-exempt or whether you have opted to charge VAT. We’ll explain this for you.

A clarification first: letting out property is generally exempt from VAT. VAT-exempt transactions are exempt from the e-invoicing requirement – so anyone letting out property tax-free does not need to issue an e-invoice.

The situation is different if you have opted to be subject to VAT. This distinction is the deciding factor, and it is precisely this that we’ll be addressing here.

This article explains both scenarios, classifies the tenancy agreement as an invoice and shows that the obligation to receive e-invoices also applies to landlords.

VAT-exempt letting: no obligation to issue an invoice

The standard case is VAT-exempt letting under Section 4(12) of the German VAT Act (UStG). This applies to the letting and leasing of land.

As these transactions are tax-exempt, they fall under the exemptions from the e-invoicing obligation. So, if you let property tax-free – such as residential accommodation – you do not need to issue an e-invoice for the rent.

Option to opt for tax liability: in which case e-invoicing applies

When letting to a business owner for their business, you can waive the tax exemption and opt to be subject to VAT. This is common in the commercial sector because it allows for input tax deduction.

If you have opted in, the letting is subject to VAT – and the e-invoicing obligation therefore applies. As a landlord subject to VAT, you must issue an e-invoice to your commercial tenant once your transition period has expired.

The tenancy agreement as an invoice

In the past, the tenancy agreement itself often served as the invoice, provided it contained the mandatory VAT details. This must be borne in mind when issuing e-invoices.

If you have opted in and are therefore obliged to issue e-invoices, the tenancy agreement alone is no longer sufficient as an invoice. Instead, you must issue a one-off e-invoice for the first partial payment period, in which the tenancy agreement is included as an annex or it is clear from the content that it is a recurring invoice. This one-off e-invoice is sufficient as long as the mandatory details – such as the rent – do not change.

We cover how recurring payments and contracts function as invoices separately:

The obligation to accept e-invoices also applies to landlords

Regardless of whether you let property on a tax-exempt or taxable basis: as a landlord, you are carrying out a business activity and must be able to accept incoming e-invoices.

This applies, for example, to invoices from tradespeople, property management companies, energy suppliers or service providers. Even those letting property tax-free cannot avoid receiving these invoices. All you need to receive them is an email inbox; we’ll take care of processing them.

We cover how to receive e-invoices separately:

Submission to us

For processing, we require your incoming invoices and – in the case of taxable lettings – your outgoing e-invoices in their original format.

The transfer takes place via the method agreed with us, such as DATEV Unternehmen Online or an alternative solution for uploading documents. Please let us know whether you have opted for VAT and, if so, for which properties, so that we can classify the invoices correctly.

Common sources of error

• Confusion between tax-exempt and taxable: It is often assumed that all lettings are affected. Tax-exempt lettings are exempt from the obligation to issue invoices; only opting in triggers this obligation.
• Rental agreement used as the sole invoice: In the case of taxable lettings, reliance is still placed solely on the rental agreement. Without a one-off e-invoice, the tenant may be unable to claim input tax deduction.
• Rent increase not reflected: Following a rent adjustment, the old e-invoice continues to be used. If mandatory details have changed, a new e-invoice is required.
• Not prepared to receive e-invoices: There is no way to accept e-invoices from tradespeople or the property management company. The obligation to receive e-invoices applies to all landlords.
• Only a printout is provided: An incoming e-invoice is printed out and passed on. We require the original structured file.

How we work together

When letting a property, we clarify the VAT situation together; you ensure the e-invoice is received, and we handle the processing.

Your tasks:

• For taxable lettings, create a one-off e-invoice linked to the tenancy agreement
• Issue a new e-invoice in the event of changes to the tenancy
• Ensure e-invoices are received and pass the supporting documents on to us

Our tasks:

• Check whether VAT applies to any properties and, if so, which ones
• Post the supporting documents and classify them for tax purposes
• Provide support with recurring invoices, deadlines and receipt

We will agree the exact breakdown with you.

Frequently asked questions

Legal notice

This article provides an overview and is not a substitute for individual advice. The VAT treatment of lettings and the option to opt for tax liability depend on the individual case; the current legal situation is decisive.

If you have any questions regarding your rental properties, please contact us directly.

As at: June 2026