How are care home costs taken into account?

If you are accommodated in a care home, nursing home or in the care department of a retirement home or residential complex due to care needs, the high costs can fortunately be deducted as extraordinary burdens.

Deductible expenses include not only the costs for medical services and care, but also the costs for accommodation and meals. This is because the expenses for home accommodation are considered medical expenses.

The deductible costs must be reduced by

• the care allowance from statutory or private nursing care insurance.
• the household saving if the household is dissolved. The household saving amounts to 909 Euro per month and 30.30 Euro per day in 2023.
• the reasonable burden, which depends on your marital status and income and ranges between 1 and 7%.

Note: If elderly people move into a "normal" retirement home, the home costs are unfortunately not tax-deductible. In this case, the accommodation costs are considered living expenses. However, if care needs arise later, the home and care costs can be fully deducted as extraordinary burdens from that point on, with the tax office applying a reasonable burden (BMF letter dated 20.1.2003, BStBl. 2003 I p. 89).