Since children in higher education are often not financially well-off, parents cover various expenses for their education. Landlords often prefer to sign the rental contract for student accommodation with the parents of the student. The question is whether the child can claim the rent and the estate agent's fee as their income-related expenses or special expenses for their first degree, even though these were paid by the parents. Recently, the Lower Saxony Finance Court dealt with the case. The rental contract for the student accommodation was in the father's name. The father covered the accommodation costs in full. According to the judges, a distinction must be made between the estate agent's fee and the ongoing rental payments. While the estate agent's fee is recognised as the child's income-related expenses, the rental payments are rejected as income-related expenses (FG Niedersachsen, 25.02.2016, 1 K 169/15).
The question of whether the deductibility of rents and estate agent's fees can be assessed differently in the case of the abbreviated contract route has not yet been decided by the highest court.
Until a ruling by the highest court, it is advisable for the rental contract to be in the student's name and for the parents to be included in the contract only as guarantors and not as tenants. In this case, the parents' rental payments to the landlord are made via the "abbreviated payment route".
Furthermore, you can also make payments to the child, and the child could then pay the rent to the landlord (so-called cash gift).
Recently, the Federal Constitutional Court ruled that the current legal regulation is constitutional. The fact that expenses for initial vocational training or a first degree cannot be deducted as income-related expenses, but only as special expenses, does not violate the Basic Law (BVerfG decision of 19.11.2019, 2 BvL 22/14, 2 BvL 23/14, 2 BvL 24/14, 2 BvL 25/14, 2 BvL 26/14, 2 BvL 27/14, published on 10.01.2020). Therefore, questions regarding the deduction of costs in connection with studies will often only arise in the case of a second or postgraduate degree or studies after completing vocational training.
