What conditions must I meet to deduct the costs of a second household?

If your place of work is far from your home and you therefore need to take a second home, this constitutes a dual household. Certain costs incurred as a result can be deducted from your taxes.

However, certain conditions must be met: Firstly, you must have a main home with your own household at your place of residence. You must also take a second home at your place of work for professional reasons. A new condition for "own household" since 2014 is the financial contribution to living expenses.

Professional reasons exist, for example, if you have been transferred to an external place of work or if you take up a job that is far away from your own home. The dual household is also considered to be for professional reasons if you move your main residence away from your workplace for private reasons and use a flat at your place of work as a second household.

Any accommodation where you have the possibility to stay overnight is recognised as a second home. How often you use this possibility is irrelevant. Accommodations can include:

• a rented flat,
• your own house,
• a hotel room,
• overnight stays with friends, or
• a barrack on a construction site.

If you drive home several times a week, you can choose whether to deduct costs for dual household or travel expenses for all home trips. In the second case, travel expenses can be deducted using the distance allowance. However, you cannot then deduct overnight costs and meal allowances as business expenses in the first three months. The second option is advisable if you frequently travel home and have low overnight costs at your second home.

(2022): What conditions must I meet to deduct the costs of a second household?

What can I deduct for second homes?

The tax office does not impose strict requirements on the employee's second home at the place of work. This can be a flat, a hotel room, or a furnished room. The frequency of use does not matter; the accommodation must simply be available. However, the second home must not become the new main place of residence, as this would end the tax benefits. If these conditions are met, various work-related expenses incurred due to maintaining a second household can be claimed for tax purposes.

This starts with the search for accommodation. Expenses incurred during the search, such as travel costs for viewing properties, telephone, or postage fees, can be deducted as work-related expenses. The tax office also recognises moving costs. These include transport costs for a removal company or rental vehicle and travel expenses on the moving day.

In the first three months of maintaining a second household, meal allowances can even be claimed. The amount of the allowances depends on the duration of absence from the main home. They are:

• 24 hours: 28 Euro
• 8 to 24 hours: 14 Euro

For travel expenses, the first journey there and the last journey back are fully recognised, e.g. by ticket. Alternatively, if a car is used, the general mileage allowance of 30 cents per kilometre can be applied. Weekly trips home are recognised with the distance allowance of 0.30 Euro per kilometre (or 0.38 Euro from the 21st km).

Accommodation costs or the costs of the second home can also be deducted as work-related expenses. Only proven costs, no flat rates, are recognised.

Since 2014, the deductible amount 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 service charges, 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 monthly 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 can be offset against the unused maximum amounts.

The Federal Fiscal Court has recently ruled against the tax authorities that the costs for the necessary furnishing of the second home in the context of a work-related second household do not count as accommodation costs, the deduction of which is limited to 1.000 Euro per month. Rather, expenses for furnishings and household items - insofar as they are necessary - are fully deductible as other necessary additional expenses due to maintaining a second household in accordance with § 9 Abs. 1 Satz 3 Nr. 5 EStG (BFH ruling of 4.4.2019, VI R 18/17).

• According to the BFH, expenses for furnishings and household items are not covered by the maximum amount, as these are incurred 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 is 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 service charges, 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 is average in terms of location and equipment, as previously always used by case law".

Tip: If the second home is owned by the employee, the actual expenses, e.g. depreciation, interest on loans, operating costs, repair costs, can be deducted as work-related expenses up to the maximum amount of 1.000 Euro per month. Here too, the costs for necessary furnishings and household items can be deducted in addition to the maximum amount (BMF letter of 24.10.2014, BStBl. 2014 I p. 1412, para. 103).

Tip: When using a furnished or partly furnished flat, a higher rent is generally payable. If the rental contract does not specify a breakdown of the rent for the use of the flat and the use of the furniture - as is usually the case - the rent paid can be apportioned on an estimated basis according to § 162 AO. The use of the flat is then deductible up to 1.000 Euro per month and the use of the furniture is deductible beyond that (BFH ruling of 4.4.2019, VI R 18/17).

Tip: The Saarland Fiscal Court has recently ruled that the costs for a rented parking space or garage do not count as accommodation costs and are therefore not subject to the 1.000 Euro limit. They can therefore be deducted even if the rent for the flat is already so high that the limit is exceeded (court order of 20.5.2020, 2 K 1251/17).

Currently, the tax authorities have announced a welcome simplification rule: If the purchase costs for the furnishings and equipment of the second home - excluding work equipment - do not exceed 5.000 Euro including VAT in total, it is assumed for simplification purposes that these costs are considered "necessary" or not excessive and are recognised as work-related expenses without further examination (BMF letter of 25.11.2020, BStBl 2020 I p. 1228, para. 108).

Tip: The Munich Fiscal Court has recently ruled against the tax authorities that expenses for the second home tax do not count as accommodation costs, which can be recognised as work-related expenses up to a maximum of 1.000 Euro per month. Rather, the second home tax can be recognised additionally as "other expenses" in the context of maintaining a second household (FG Munich of 26.11.2021, 8 K 2143/21).

(2022): What can I deduct for second homes?

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, no flat rates. Any accommodation where you have the possibility to stay overnight is recognised as 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 the location of your second home, you can claim the rent and ancillary rental 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 usage period is 13 years. If you use a hotel as an overnight 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:

• for breakfast by 20 percent and
• for lunch or dinner by 40 percent 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 mortgage loans, depreciation, etc.) up to the amount that rent for a reasonable flat would cost.

Since 2014, in the case of a second household in Germany, the deductible amount 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.

Currently, the Federal Fiscal Court has ruled against the tax authorities that the costs for the necessary furnishing of the second home as part of a work-related second household do not count as accommodation costs, the deduction of which is limited to 1.000 Euro per month. Rather, expenses for furnishings and household items - insofar as they are necessary - are fully deductible as other necessary additional expenses due to a second household in accordance with § 9 para. 1 sentence 3 no. 5 EStG (BFH ruling of 4.4.2019, VI R 18/17).

• 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 is average in terms of location and equipment, as previously always used by case law".

If the second home is owned by the employee, the actual expenses, e.g. depreciation, interest on loans, operating costs, repair costs, can be deducted as income-related expenses up to the maximum amount of 1.000 Euro per month. Here too, the costs for necessary furnishings and household items can be deducted in addition to the maximum amount (BMF letter of 24.10.2014, BStBl. 2014 I p. 1412, para. 103).

When using a furnished or partly furnished flat, a higher rent is generally payable. If the rental contract does not include a breakdown of the rent for the use of the flat and the use of the furniture - as will usually be the case - the rent paid can be apportioned by estimation according to § 162 AO. The use of the flat is then deductible up to 1.000 Euro per month and the use of the furniture is deductible beyond that (BFH ruling of 4.4.2019, VI R 18/17).

The Saarland Fiscal Court has ruled that the costs for a rented parking space or garage do not count as accommodation costs and are therefore not subject to the 1.000 Euro limit. They can therefore also be deducted if the rent for the flat is already so high that the limit is exceeded (court order of 20.5.2020, 2 K 1251/17).

Currently, the tax authorities have announced a welcome simplification rule: If the purchase costs for the furnishings and equipment of the second home - excluding work equipment - do not exceed a total of 5.000 Euro including VAT, it is assumed for simplification purposes that these costs are considered "necessary" or not excessive and are recognised as income-related expenses without further examination (BMF letter of 25.11.2020, BStBl 2020 I p. 1228, para. 108).

Currently, the Munich Fiscal Court has ruled against the tax authorities that expenses for the second home tax do not count as accommodation costs, which can be recognised as income-related expenses up to a maximum of 1.000 Euro per month. Rather, the second home tax can be additionally recognised as "other expenses" in the context of a second household (FG Munich of 26.11.2021, 8 K 2143/21).

(2022): Which accommodation expenses can I deduct?

Which relocation expenses can I deduct?

In connection with the occupancy of the second home, you can deduct the actual costs incurred for tax purposes. This begins with the house hunting: Expenses related to house hunting, such as travel costs for viewing properties, telephone or postage fees, are deductible as business expenses.

The tax office also recognises the costs for the move. You can deduct the costs of the removal company, expenses for a rental vehicle, helper wages or moving boxes. The estate agent's fee for obtaining the new rental property is also deductible, but not the estate agent's fee for purchasing a home at the place of employment. Please note that you must provide individual proof of your moving costs as part of the double household, as the moving cost allowance is not granted because you are not relocating your main residence. The deductibility of moving costs also applies to your return move to your main residence. If you need to carry out redecoration work when moving out of your second home, you can also include these in your tax return.

(2022): Which relocation expenses can I deduct?

When is a second household recognised?

A prerequisite for the tax recognition of a second household is that you maintain your own household at your home location. The household is a furnished flat that forms your main place of residence and where you maintain your household. You must use the flat as an owner, tenant, or from a joint or derived right of use (e.g. in your partner's flat).

Another requirement is that you contribute financially to the costs of the main household. For married couples, the own household is usually where the family lives. If you are single, the recognition of your own household plays an important role in the deductibility of costs for a second household. It is not sufficient if you occupy a room in your parents' house or flat, even if you contribute to the rent.

You need your own furnished flat, which you use as an owner, tenant, or subtenant. You must maintain a household there, i.e. determine or significantly co-determine the household management. If you can prove at least two trips home per month, it is generally assumed that this is your main place of residence.

(2022): When is a second household recognised?

How far may the second home be from the place of work?

A second household exists if you are employed outside your main residence and also live at the external place of employment. It is permissible for the second home to be located outside this place but within its catchment area. The catchment area is the region from which commuters usually travel to the workplace daily. It must be possible to visit the workplace daily.

But the question is how far the second home can be from the place of employment for the rental costs to be recognised.

The Federal Fiscal Court has deemed it permissible for the second home to be 141 km from the place of employment. The special feature in this case was that the employee had acquired property at the original place of work and the employer had then relocated the company headquarters, so the employee commuted daily the 141 km to the new company headquarters. It was possible to visit the workplace daily by train. The journey by ICE took one hour, and such a time expenditure is quite usual (BFH ruling of 19.4.2012, VI R 59/11).

The Federal Fiscal Court has ruled that the second home is still within the catchment area of the place of employment if the distance is 83 km and the workplace can be reached in less than an hour. For the recognition of the second household, it is also irrelevant if the distance between the second home and the family home is significantly shorter at 47 km. The decisive factor here is that a distance of 83 km and a travel time of less than an hour is a usual commuting distance and time (BFH ruling of 26.6.2014, VI R 59/13).

In the case, it was not possible to reach the place of employment from the main residence in a reasonable manner. The route was heavily affected by construction sites and traffic jams, so daily commuting with travel times of up to two hours per journey was unreasonable, and the use of a second home at the place of employment was indicated. The travel time from the second home was less than an hour.

Legal situation from 2014: It is now regulated how far the second home may be from the external place of employment (first place of work): The second home is still within the catchment area of the place of employment if the distance from the second home to the place of work is less than half the distance between the main residence and the place of work. However, the Federal Ministry of Finance has once again revised its principles for recognising a second household (BMF letter of 25.11.2020, BStBl 2020 I p. 1228 para. 100 ff.):

• If the employee can still reach their first place of work, i.e. their place of employment, in a reasonable time from their main residence, any existing second home is irrelevant for tax purposes. A second household is then not recognised. A travel time of up to one hour per journey, based on individual traffic connections and travel times, can generally be considered reasonable.
• If the distance between the main residence and the first place of work is more than 50 km and the second home is at the place of employment, it is assumed for simplification purposes that the second home is for work-related reasons. Consequence: The costs of the second household can be claimed as business expenses if the other requirements are met. This includes, in particular, that the employee actually contributes financially to the costs of the household in their home country.

When it was previously mentioned that the second home must be at the external place of employment, more precisely at the place of the first place of work, this is the standard case. However, the second home may also be located outside this place in exceptional cases. The tax authorities state:

• For simplification purposes, it can be assumed that the second home is still located at the place of the first place of work if the distance of the shortest road connection between the second home or accommodation and the first place of work is not more than 50 km.
• If the second home is more than 50 km from the place of the first place of work, it must be checked whether the first place of work can still be reached daily from the second home or accommodation in a reasonable manner. A travel time of up to one hour per journey, based on individual traffic connections and travel times, is considered reasonable.

In practice, employees often make compromises: On the one hand, they want to move closer to their place of employment to make daily commuting more bearable. On the other hand, they do not want to be so far from their home town that "home trips during the week" would be too time-consuming. Therefore, they choose their second residence somewhere between home and work. In these cases, some calculations are necessary:

• For simplification purposes, it can be assumed that the second home or accommodation is for work-related reasons,
• if the distance from the second home to work is less than half the distance between the main residence and the workplace, or
• if the travel time to the first place of work is halved for one journey.
• The shortest road connection is decisive for checking the distance.
• If the conditions of this simplification rule are not met, the employee must demonstrate the existence of a work-related second household in another way based on the specific circumstances of the individual case.
• When work or workplace is mentioned, this specifically refers to the so-called first place of work.

Mr Steuerle has his main residence in B and his first place of work in C. The distance from B (main residence) to C is 100 km and the travel time by ICE is 50 minutes. He takes a second home in Z. The distance from this second home in Z to C (first place of work) is 30 km.

Due to the distance of more than 50 km between the main residence and the first place of work, the main residence is not at the place of the first place of work. A check of the travel time between the main residence and the first place of work is not required. The second home in Z is 30 km away and therefore still at the place of the first place of work. Therefore, a second household exists. Since the shortest road connection from the second home to the first place of work (30 km) is also less than half the road connection between the main residence in B and the first place of work (1/2 of 100 km = 50 km), it can also be assumed that the second household is for work-related reasons.

The distance from B (main residence) to the first place of work is 56 km and the travel time is 65 minutes. The second home in Z is 30 km from the first place of work and the daily travel time is 25 minutes.

Due to the distance of more than 50 km between the main residence and the first place of work, the main residence is not at the place of the first place of work. A further check of the travel time between the main residence and the first place of work is not required. The second home in Z is 30 km away and therefore still at the place of the first place of work. Therefore, a second household exists. Although the shortest road connection from the second home to the first place of work (30 km) is more than half the shortest road connection between the main residence and the first place of work (28 km), Mr Steuerle can demonstrate that the travel time to the first place of work from the second home is more than halved and thus significantly reduced (travel time 25 minutes); therefore, it can still be assumed that the second household is for work-related reasons.

(2022): How far may the second home be from the place of work?

What can be deducted when moving away from your place of work?

It is not uncommon for employees to move away from their place of work, i.e., relocate their residence away from their place of work. Some have built or purchased a home in the countryside, others move to a more attractive area with high recreational value. Others move out of the marital home and in with a new partner. Single people move in with their partner at another location. In these cases, you may claim business expenses for additional meal allowances.

If you then keep your previous accommodation as a second home at your place of work or rent a smaller flat, you could not previously deduct any costs for double housekeeping for tax purposes. This was because the double housekeeping was considered to be for private reasons due to the move.

• In 2009, the Federal Fiscal Court fortunately changed its previous case law in favour of employees: Double housekeeping is now also considered to be for business reasons if the main residence is moved away from the place of work for private reasons and a flat at the place of work is used as a second household. It does not matter whether the previous flat is kept as a second home or a new flat is rented (BFH rulings of 5.3.2009, BStBl. 2009 II p. 1012 and 1016).

• The tax authorities accept the generous new view of the BFH – but with one restriction: After moving the main residence and taking up a second home, meal allowances are not recognised for the first three months if you had already lived at or near the place of employment for at least three months beforehand (BMF letter of 10.12.2009, BStBl. 2009 I p. 1599).

Current decision: The Federal Fiscal Court has ruled against the tax authorities and in favour of employees that meal allowances may also be deducted for tax purposes for the first three months in cases of relocation. This is because double housekeeping is established when the previous flat is converted into a second home. Therefore, the three-month period begins when the previous flat is converted into a second home (BFH ruling of 8.10.2014, VI R 7/13).

The case: The employee lived and worked in Düsseldorf. After meeting his current wife, he moved to a small town on the Lower Rhine and relocated his main residence there. He kept the flat in Düsseldorf as a second home. In his tax return, he claimed meal allowances for the first three months after his move. The tax office refused to recognise them, but the tax court and the BFH granted them.

If you move your residence from your place of work to another location and designate your previous flat as a second home, you can now claim meal allowances, even though your meal situation at your place of work has not actually changed. According to the BFH, it is irrelevant for the tax consideration of meal allowances whether there was actually an increased need for additional meals and whether the employee is familiar with the meal situation at the place of work.

(2022): What can be deducted when moving away from your place of work?

When can single people claim dual household maintenance?

Single individuals can also claim the costs of maintaining a second household as business expenses. One of the requirements is that they maintain their own household.

An own household is a furnished apartment,

• which represents the centre of your life interests,
• which you use by your own right or a derived right,
• in which you "maintain" or co-maintain a household, i.e. determine or significantly co-determine the household management,
• and financially contribute to the household costs (new from 2014).

Of particular importance is the question of whether you use the apartment free of charge or for a fee and whether you financially contribute to the household management. An "own household" in the case of a second household is only recognised if the single employee financially contributes to the household costs (§ 9 Abs. 1 Nr. 5 EStG 2014).

It is not sufficient if the employee, for example, only occupies one or more rooms in their parents' household or if the employee is allowed to use an apartment in their parents' house free of charge. It is required that the financial contribution to the household management costs is not merely trivial amounts (BMF letter dated 24.10.2014, BStBl. 2014 I p. 1412, para. 100).

• If the cash payments exceed 10% of the regularly incurred monthly running costs of the household management (e.g. rent, ancillary rental costs, costs for food and other daily necessities), it is assumed that the financial contribution is above the trivial limit.
• If the cash payments are less than 10% of the running household costs, the employee can demonstrate sufficient financial participation in other ways, e.g. financing joint holidays, car costs or major purchases.
• How should a single person demonstrate their financial contribution to the household management in the tax return? As there is no query line for this in the tax form, they should simply wait for a possible enquiry from the tax office.

The Lower Saxony Finance Court has ruled that regular participation in the ongoing housing and consumption costs is not required, as neither the wording of the law nor the legislative materials indicate this (judgment of 18.9.2019, 9 K 209/18).

The case: The claimant rented an apartment at his place of work. He also lived in a non-self-contained apartment in the upper floor of his parents' house with his brother. There is no rental contract for this apartment. In his tax return, the claimant stated that he had contributed a total of 3,160.47 Euro to his parents' household in 2015. He detailed and proved with credit card statements that he had made grocery purchases throughout the year. He also provided bank statements for a transfer of 1,200 Euro (purpose: ancillary costs/telecommunications) and a transfer of 550 Euro (purpose: share of new windows in 2015) to his father. Both bank statements were dated December 2015. However, the tax office did not consider this sufficient proof of financial participation and rejected the deduction of costs for the second household. The claimant had not demonstrated the amount of regularly incurred monthly living costs for the household management. However, the action against this was successful.

Reasoning of the court: In the case in dispute, the claimant had financially contributed to the living costs of the parental household through the one-off payments in December and the documented grocery purchases. The timing of the payment (beginning, middle or end of the respective year) was irrelevant. Financial amounts paid at the end of the year can also be sufficient. Contrary to the opinion of the tax authorities, an even participation in the monthly running expenses for rent etc. cannot be required. Therefore, payments made at the end of the year should not only be partially considered - after a twelfth - but rather in full.

The judges even consider the inclusion of payments outside the year in dispute to be conceivable, provided the payments have their economic cause in the respective year in dispute (e.g. participation in ancillary costs after presentation of the ancillary cost statement in the following year).

Even if the judgment contains many positive statements, a tightening compared to the general opinion can be seen: Living costs are understood to be (only) those expenses for the design of private life that have a household reference, essentially rent and house costs, consumption and other ancillary costs, expenses for the purchase and repair of household appliances and items, costs for food and telecommunications costs. However, costs for holidays, cars, leisure activities, health care, clothing, etc. are not included due to lack of household reference.

Tip: An appeal is currently pending against the judgment at the Federal Fiscal Court under the reference number VI R 39/19. If the tax office has rejected a second household for you with the argument of missing cost participation, you should appeal against this and refer to the aforementioned case. If possible, you should not let it come to a dispute at all, but rather set up a standing order and transfer an appropriate amount "participation in rent and house costs" to your parents monthly.

Currently, the Münster Finance Court has ruled that despite the completion of vocational training, the conditions for a second household are not met if the child has rented their own apartment at the place of work but only has a room, the former child or youth room, at home with their parents. Even if they have demonstrably contributed to the costs of their parents' household, this is not sufficient for the recognition of their own household (judgment of 7.10.2020, 13 K 1756/18 E).

(2022): When can single people claim dual household maintenance?

What is deductible if I live with my partner in the second home?

It is not uncommon for spouses to work at the same secondary place of employment and live together in a second home during the week. They maintain their home at the primary residence and return there regularly. Tax offices often assume that the main place of residence is at the place of employment and refuse to recognise dual housekeeping.

However, the decisive factor is whether the main residence is still considered the centre of life or whether, as a result of living together, the second home has become the centre of life. Living together in the second home does not affect the recognition of dual housekeeping as long as the second home does not become the new centre of life.

The Federal Fiscal Court recently ruled that for both spouses who are employed and live with their children in family accommodation at the place of employment, the centre of life interests must be determined as part of an overall assessment of the individual circumstances based on certain criteria. Although there is a presumption that the centre of life interests is usually at the place of employment, the taxpayer can rebut this presumption (BFH ruling of 1.10.2019, VIII R 29/16).

For childless spouses who jointly maintain family accommodation at the place of employment, it is "usually" assumed that the centre of life is at the place of employment (standard presumption). This applies even more so if the spouses live with their children in family accommodation at the place of employment, even if the former family home is retained and still used occasionally. However, in this case, the "overall assessment of all individual circumstances" must also be taken into account.

In the "overall assessment of all individual circumstances", it is important to consider how often and for how long the taxpayer stays in each home, how both homes are equipped and their size. The duration of the stay at the place of employment, the distance between the two homes, and the number of trips home are also significant. Considerable weight is also given to the location to which closer personal ties, such as the nature and intensity of social contacts, club memberships, and other activities, exist.

It cannot simply be assumed that spouses who both live with their school-age children in family accommodation at the place of employment "necessarily" have their centre of life at the place of employment. Rather, an overall assessment of the individual circumstances is always required. Although there is a standard presumption for the overall assessment that the centre of life is at the place of employment, the taxpayer can present individual circumstances that indicate a centre of life for both working spouses at their home location.

If both spouses/partners are employed at the secondary place of employment and live together in the second home, each has a dual household for tax purposes. Each can deduct half of the accommodation costs - and since 2014, each up to a maximum of 1.000 Euro per month. Each can also claim the full meal allowances for the first three months.

(2022): What is deductible if I live with my partner in the second home?

Is the relocation allowance also deductible for a second household?

In the context of maintaining a second household, various costs can be deducted as business expenses. Deductible costs include the move to the second home at the place of employment as well as the termination of the second home after the end of the external work assignment.

You can claim the following as moving expenses: transport costs (removal company, rental vehicle, helper wages, moving boxes), travel expenses on the moving day and for viewing properties, estate agent fees. The question is whether the "lump sum for other moving expenses" is also deductible.

Currently, the Thuringia Finance Court has ruled that in the context of maintaining a second household, the costs for moving to the second home at the place of employment are only deductible with proof and the moving expense allowance is not considered. According to income tax guidelines, the moving expense allowance is explicitly excluded for maintaining a second household (R 9.11 para. 9 sentence 2 LStR). In the case of a "small" move to the place of employment, the main residence is not relocated (Thuringia Finance Court, 29.6.2015, 2 K 698/14).

Moving expenses in the context of maintaining a second household include not only the move to the second home but also the return move from the second home to the main home. The moving expense allowance is also not deductible for the return move, as the main residence is not relocated.

The situation is different if you end the second household by relocating the family household and main residence to your external place of employment with a "large" move. In this case, the moving expenses are not deductible as costs of maintaining a second household but as general business expenses (according to § 9 para. 1 sentence 1 EStG). And in this case, you can also claim the moving expense allowance.

(2022): Is the relocation allowance also deductible for a second household?

Can the costs for furnishing the flat be deducted additionally?

In the context of an occupationally related second household, accommodation costs or second home costs can also be deducted as business expenses or reimbursed tax-free by the employer. Only proven costs are recognised, not flat rates. But what about newly purchased furnishings?

The Federal Fiscal Court has recently ruled against the tax authorities that the costs for the necessary furnishing of the second home in the context of an occupationally related second household are not part of the accommodation costs, the deduction of which is limited to 1.000 Euro per month. Rather, expenses for furnishings and household goods - insofar as they are necessary - are fully deductible as other necessary additional expenses due to a second household in accordance with § 9 (1) sentence 3 no. 5 EStG (BFH ruling of 4.4.2019, VI R 18/17).

• According to the BFH, expenses for furnishings and household goods are not covered by the maximum amount, as they are incurred only for their use and not for the use of the accommodation. The use of furnishings is not the same as the use of the accommodation itself. The legislative aim of the new regulation is 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 with average location and facilities, as previously always used by case law".

(1) If the second home is owned by the employee, the actual expenses, e.g. depreciation, interest on loans, operating costs, repair costs, are deductible as business expenses up to the maximum amount of 1.000 Euro per month. Here too, the costs for necessary furnishings and household goods can be deducted in addition to the maximum amount (BMF letter of 24.10.2014, BStBl. 2014 I p. 1412, para. 103).

(2) When using a furnished or partly furnished flat, a higher rent is generally payable. If the rental contract does not specify a breakdown of the rent for the use of the flat and the use of the furniture - as is usually the case - the rent paid can be apportioned on an estimated basis in accordance with § 162 AO. The use of the flat is then deductible up to 1.000 Euro per month and the use of the furniture is deductible beyond this (BFH ruling of 4.4.2019, VI R 18/17).

(3) If the purchase costs for an individual item do not exceed 800 Euro (excluding VAT), they are immediately and fully deductible. This applies to purchases from 1.1.2018. Previously, the limit was 410 Euro. Higher costs must be spread over the expected useful life and are only deductible with the annual amount as "depreciation for wear and tear". The useful life for furniture is 13 years.

Currently, the tax authorities have announced a welcome simplification: If the purchase costs for the furnishings and equipment of the second home - excluding work-related items - do not exceed a total of 5.000 Euro including VAT, it is assumed for simplification purposes that these costs are considered "necessary" or not excessive and are recognised as business expenses without further examination (BMF letter of 25.11.2020, BStBl 2020 I p. 1228, para. 108).

(2022): Can the costs for furnishing the flat be deducted additionally?