What should a garage rental contract include?
A garage rental contract should be clear and comprehensive. This way, both landlord and tenant know exactly what is expected. The following elements should not be left out:
Rent and monthly payment
The rent and the monthly amount must be clearly stated. Agree on the due date and method of payment. A standing order is often used so that payments remain traceable.
It can also be useful to include provisions on rent indexation. This avoids discussions in the future.
Duration of the agreement and notice period
A garage rental contract can be drawn up for a fixed term or an open-ended period. State clearly when the contract begins and what notice period applies.
This gives both sides clarity: the tenant knows how long they can use the unit, and the landlord knows when it will be available again.
Inventory and handover
An inventory report is essential at the start of the tenancy. It records the condition of the garage unit, making it easier to determine later if any damage has occurred.
Including this in the rental contract protects both landlord and tenant and helps avoid disputes at the end of the agreement.
Obligations of landlord and tenant
The obligations of both parties should be clearly written into the contract. For the landlord, this includes providing the garage in good condition. For the tenant, it usually involves proper use of the space and timely rent payments.
Other clauses, such as maintenance, insurance, or restrictions on subletting, may also be included. Together, these ensure a workable contract for both parties.
Taxes and VAT when renting out a garage unit
Anyone renting out a garage unit has to consider not only the rental contract but also taxation. Depending on the situation, VAT obligations and other taxes may apply.
VAT obligations and applying for a VAT number
If you are renting out a garage privately, VAT is often not applicable. However, in certain cases you may be VAT liable for example, if the garage is part of commercial property or if the rental is organised on a professional basis.
In such cases, you must apply for a VAT number with the tax authorities. This number is used for reporting income and issuing invoices.
Periodic VAT returns and being VAT liable
If you are VAT liable, you must also file periodic VAT returns. These may be monthly or quarterly, depending on your status.
Small businesses may qualify for simplified rules, but accurate reporting is always necessary to avoid penalties.
Property tax and other charges
Alongside VAT, property tax also applies. This is an annual tax paid by property owners, including garages.
The landlord should take this into account when setting the rent. Other taxes, such as personal income tax or corporation tax, may also apply depending on whether you rent as a private individual or through a company.
Frequently asked questions about garage rental contracts
Is registration of a rental contract compulsory?
Yes. In most cases, a rental contract for a garage must be registered with the tax authorities. This gives the document legal force. The landlord is responsible for ensuring registration, which protects both landlord and tenant.
What is a typical rent for a garage unit?
The rent depends on the location, size, and facilities. In city centres, monthly rent is usually higher due to limited capacity, while suburban or residential areas may be cheaper. On average, rents range from €50 to €150 per month, but this can be higher in prime areas or near stations.
Can you draft a rental contract yourself?
Yes. You can draft a contract yourself, as long as the key points are included: rent, duration, inventory, and notice period. However, using a template or seeking legal advice can help avoid mistakes.
Can I rent a garage without a rental contract?
No. A rental contract is always required when renting or letting a garage. While verbal agreements are technically possible, a written contract is strongly recommended to prevent misunderstandings.
