(2021) Which accommodation expenses can I deduct?

As part of maintaining a second household, you can deduct the costs for overnight stays in your second home. Only proven costs are recognised, not flat rates. Any accommodation where you have the possibility to stay overnight is considered a second home. How often you use this possibility is irrelevant. Accommodations can include:

• a rented flat,
• your own house, or
• a hotel room.

If you use a rented flat at your second place of residence, you can claim the rent and ancillary costs such as heating or electricity for the second home. Expenses for necessary furnishings can also be deducted. This includes items such as a table, bed, wardrobe, or kitchen and bathroom furnishings. For purchase costs up to 800 Euro net, the amount can be deducted in full immediately; more expensive items must be depreciated over a longer period. For new furniture, the service life is 13 years. If you use a hotel as accommodation, you can deduct the actual proven overnight costs. If meal costs are included in the overnight price and not shown separately, the deductible amount is reduced by the following items:

• by 20 percent for breakfast and
• by 40 percent for lunch or dinner of the meal allowance for 24-hour absence (28 Euro).

If you live in a privately owned flat, you can deduct your expenses (ancillary costs of the flat, interest on a mortgage loan, depreciation, etc.) up to the amount that a reasonable rented flat would cost.

Since 2014, the deductible amount for maintaining a second household in Germany has been limited to a maximum of 1.000 Euro per month. This maximum amount includes all expenses for the accommodation or flat that are borne by the employee, in particular rent including operating costs, also for a furnished flat, purchase costs for necessary household and furnishing items, second home tax, renovation, etc. The maximum amount of 1.000 Euro applies on a monthly basis and as an average value for the entire year. If the expenses are less than 1.000 Euro in some months and more than 1.000 Euro in other months, the excess amounts may be offset against the unused maximum amounts.

 

• According to the BFH, expenses for furnishings and household items are not covered by the maximum amount, as these are incurred only for their use and not for the use of the accommodation. The use of the furnishings is not the same as the use of the accommodation itself. The legislative aim of the new regulation was to limit only the costs for the accommodation to 1.000 Euro per month, not other necessary expenses.
• The maximum deductible amount of 1.000 Euro per month includes, according to the explanatory memorandum to the law, "all expenses incurred for the accommodation or flat, e.g. rent including operating costs, rental or lease fees for parking spaces, also in underground garages, expenses for special use (such as garden, etc.) borne by the employee". The amount of 1.000 Euro is based "on a flat of approximately 60 sqm, which has always been used by the courts as a reference, depending on location and equipment".