Can I also claim the tax reduction as a tenant?

Yes, because you do not need to own the flat to claim the expenses.

Taxpayers who wish to claim tax reductions for household-related services or tradesmen's services do not need to be the client of the measure carried out. Therefore, tenants can also claim costs for services commissioned by the landlord and paid by them as part of the service charges.

If the landlord has commissioned household-related services and tradesmen's services, tenants can claim the amounts paid for service charges as a tax reduction, also within the specified maximum amounts.

With the service charge statement for the flat, you can save a significant amount of tax, as many items can reduce the tax burden as household-related services or tradesmen's services. For service charges, this mainly concerns the items

• Garden maintenance
• House cleaning
• Caretaker activities
• Chimney sweep fees
• Lift maintenance.

To claim their entitlement with the tax office, the tenant needs a certificate from the landlord containing the required information. The "normal" service charge statement usually does not contain the necessary information. The tenant is entitled to receive such a certificate.

Note: If you are renting, you can also claim tax benefits for household-related employment or tradesmen's services if these were commissioned by you and carried out in your flat.

(2022): Can I also claim the tax reduction as a tenant?

Work carried out in the workshop of the craft business is not eligible.

Expenses for craftsmen's services are deductible from the tax liability at 20%, up to a maximum of 1.200 Euro per year. Only labour costs are eligible, and only for work on and in the owner-occupied home. The question of the extent to which work carried out in the workshop of the craftsman's business is also eligible had long been unclear.

The Federal Fiscal Court has now decided the matter: If work is carried out in a craftsman's workshop, the associated labour costs are not eligible for relief under § 35a para. 3 EStG (BFH rulings of 13.5.2020, VI R 4/18 and VI R 7/18).

According to the BFH, services provided outside the household are not eligible, even if they are provided for the household. What matters is where the service is actually performed. A craftsman's service carried out in the craftsman's workshop on a household item does not have a (direct) spatial connection with the household for which it is provided, but only a functional one. Whether the service result is achieved in the household is therefore generally irrelevant. The spatial-functional connection to the household cannot be established solely by the fact that the craftsman's service relates to a household item.

The first case concerned the repair of a courtyard gate, which was removed by the carpenter, repaired in his workshop, and then reinstalled. A tax reduction for the repair of the courtyard gate is only possible to the extent that the carpenter carried out the work on the property and not in his workshop (VI R 4/18).

The second case involved the manufacture, galvanisation, delivery, and installation of a door (workshop and installation work). There is no tax relief for the manufacture and galvanisation of the door in the workshop, only partially for the installation work in the household (VI R 7/18).

Ensure that the labour costs for the on-site service (installation) are itemised separately on the invoice. However, even if this is not the case, the labour costs can be apportioned on an estimated basis. According to the BFH, "it is indeed possible to apportion the labour costs into a non-eligible 'workshop wage' and an eligible 'on-site wage'. Such an apportionment does not contradict the legislative intent to combat undeclared work" (VI R 4/18, VI R 7/18).

(2022): Work carried out in the workshop of the craft business is not eligible.

Which expenses are eligible?

Eligible expenses include gross wages or earnings (for "mini-jobs") and the social security contributions paid by the employer, wage tax including the solidarity surcharge and church tax, accident insurance contributions, and levies under the Expense Reimbursement Act (U 1 and U 2).

(2022): Which expenses are eligible?

Can I deduct the costs for a tradesperson in addition to the costs for my cleaner?

Yes, you can claim the invoice for craftsmen's services (wages) and the wages for your domestic help simultaneously in the tax return. In addition to the wages for domestic help, you can also deduct the wages for craftsmen up to 6.000 Euro at 20 percent, a maximum of 1.200 Euro per year, directly from the tax liability.

Tax benefits apply not only to regular renovation work but also to one-off maintenance and modernisation measures - and not just in the flat, but also on the property. The benefits apply not only to work that could usually be done by household members but also to work that can only be carried out by professionals, e.g. repairing a washing machine. The important thing is that the repair of the machine takes place in your household.

(2022): Can I deduct the costs for a tradesperson in addition to the costs for my cleaner?

What evidence is required?

To receive the tax reduction, you must observe one condition:

You must obtain an invoice from the service provider as proof of expenditure, and you may only pay this invoice by bank transfer to their account. Ensure that the invoice separates labour and material costs. Only labour costs, as well as machine and travel costs including the VAT on them, are eligible for tax benefits. However, VAT does not need to be shown separately; you may add it to the labour costs.

It is not necessary to attach the bank statement to the tax return. However, in case of doubt, the tax officer may request it. Amounts paid by standing order, direct debit, or online banking are recognised in conjunction with the bank statement. Cash payments are not recognised.

The condition of bank transfer still applies. Invoices paid in cash will not be recognised.

Household-related services also include home care and support for persons in need of care by mobile care services or self-employed carers. Since 2009, it is no longer necessary to prove the need for care and a care level (until 2016) or a care grade (from 2017).

If you do not yet have a current service charge statement or a separate certificate according to § 35 a EStG for 2022 from your property management, this is not a problem. It is permissible to claim the total expenses for the tax year in which the statement is received by the tenant. You therefore take the most recent service charge statement you have – presumably from 2021 – and claim these costs in the tax year 2022. All tenants and property owners who have not yet received the current certificate according to § 35 a EStG for 2022 can proceed in this way!

All private individuals who have commissioned craftsmen or service providers claim the expenses in the tax year in which they paid the corresponding invoice themselves.

In 2019, the Federal Fiscal Court unfortunately ruled against the generous stance of the tax authorities that the tax reduction according to § 35a EStG is only granted for expenses incurred by a taxpayer for their own accommodation in a home or for their own care. However, the tax benefit is excluded for expenses incurred for another person, i.e. when children cover the costs for their parents (BFH ruling of 3.4.2019, VI R 19/17).

A few months after the BFH ruling, the Berlin-Brandenburg Fiscal Court also dealt with the assumption of care costs for a parent. This time, however, it was not about covering the costs for inpatient care, i.e. accommodation in a home, but about covering the costs for outpatient care. The FG ruled as follows: § 35a EStG favours - if at all - only expenses for the outpatient care of relatives in the taxpayer's own household (i.e. the carer's), not for the outpatient care of relatives in their household (BFH ruling of 11.12.2019, 3 K 3210/19). However, a revision was explicitly allowed at that time. And now the positive BFH ruling is available.

Currently, the Federal Fiscal Court has ruled as follows: The tax reduction according to § 35a para. 2 sentence 2 first half-sentence EStG can also be claimed by taxpayers who incur expenses for the outpatient care and support of a third party. Consequently, children can deduct the costs for outpatient care of their parents if they have borne the costs. This also applies if the care and support services are not provided in the taxpayer's own household but in the household of the person being cared for or supported (BFH ruling of 12.4.2022, VI R 2/20).

However, the BFH also complicates matters, as it upholds its above-mentioned ruling from 2019. It distinguishes between covering the costs for inpatient care (= still not deductible) and covering the costs for outpatient care (= deductible), where in the second case it depends on who concluded the care contract. Only if the payer, usually daughter or son, is contractually obliged, i.e. pays for their own debt, are the costs deductible. However, if payment is made for the debt of the person being cared for, i.e. father or mother, because they concluded the care contract, it is a tax-irrelevant third-party expense.

(2022): What evidence is required?

Requirements for all tax reductions

The service must have been performed in the taxpayer's household. This condition is not met, for example, in the case of

• care and support for sick, elderly, and dependent persons in a day care facility,
• repair of household items at the repair company's premises,
• waste collection (the processing or disposal of waste takes place outside the household)

The household must be located in the European Union or the European Economic Area. If the taxpayer's expenses relate to several households (e.g. main residence and holiday home), the maximum amount is deductible only once in total.

Not eligible are expenses that have already been taken into account for tax reduction under other provisions of the Income Tax Act as business expenses, income-related expenses, special expenses, or extraordinary burdens.

Special feature for apartment owners: Apartment owners who use their apartment themselves receive the tax reduction even if the community or the administrator is the employer or client. This is done proportionally according to their co-ownership share.

The costs for waste collection are currently not considered as household-related services in the tax return. The tax authorities rely on an old ruling by the Cologne Fiscal Court dated 26.1.2011 (4 K 1483/10, EFG 2011 p. 978 no. 11).

The reasoning is said to be that the main service is not performed within the property boundaries of the taxpayers. The actual service is not the collection of the waste, but its subsequent disposal and processing. The emptying and transport of the waste are merely ancillary services. The Münster Fiscal Court has currently confirmed this view but has explicitly allowed an appeal, which is already pending (judgment of 24.2.2022, 6 K 1946/21 E, appeal under VI R 8/22).

(2022): Requirements for all tax reductions

Which measures are subsidised as craftsmen's services and what is the amount of the tax reduction?

As part of the craftsmen's services, all expenses for renovation, maintenance, and modernisation measures for the home used for own residential purposes are eligible. These include, for example:

• Work on interior and exterior walls,
• Work on the roof, facade, garages, etc.,
• Repairs or replacement of windows and doors,
• Painting, repairs, and replacement of doors, windows (inside and outside), fitted cupboards, fitted kitchens, radiators and pipes,
• Repairs and replacement of floor coverings (e.g. carpets, parquet, tiles),
• Repairs, maintenance, or replacement of heating systems, electrical, gas, and water installations by electricians and plumbers,
• Modernisation work in the bathroom,
• Repairs and maintenance of household items (e.g. washing machine, dishwasher, cooker, television, personal computer),
• Garden design measures (e.g. paving work, new garden layout),
• Paving work on the residential property,
• Inspection work (e.g. chimney sweep, lightning protection, fire extinguishers and alarms).

An exemplary list of eligible and non-eligible household-related services and craftsmen's services can also be found in the BMF letter dated 09.11.2016.

Expenses for craftsmen's services – only for wages, travel, and machine costs – are deductible from the tax liability up to 6,000 Euro at 20 percent, a maximum of 1,200 Euro per year.

Not eligible are craft activities as part of a new construction measure. The term "new construction measure" has been redefined since 2014: According to the new legal opinion, all work related to the construction of a household until its completion is considered a new construction measure. This means: All work in an existing household is now tax-privileged. If new living or usable space is created as a result, this no longer matters. This new definition applies retroactively to all still open tax cases since 2006.

Previously, new construction measures included all measures related to the creation or expansion of usable or living space, e.g. new construction, extension, expansion, or an increase in height, as these always involved an expansion or creation of usable or living space.

For craftsmen's services by public authorities, which benefit not only individual households but all households involved in the public authority's measures, a benefit under § 35a EStG is excluded. There is no spatial-functional connection of the craftsmen's services with the household of the individual property owner. This concerns, for example, the expansion of the general supply network or the development of a road (BMF letter dated 1.9.2021, IV C 8 - S 2296-b/21/10002 :001).

The Federal Fiscal Court has currently refused the tax reduction under § 35a EStG for static calculations by a structural engineer. This also applies if the static calculation was necessary for the execution of a craftsman's service (BFH judgment of 4.11.2021, VI R 29/19).

(2022): Which measures are subsidised as craftsmen's services and what is the amount of the tax reduction?

How are chimney sweep fees taken into account?

Eligible craftsmen's services, which can be deducted directly from the tax liability at 20%, also include chimney sweep fees.

Due to a taxpayer-friendly Federal Fiscal Court (BFH) ruling, tax offices accept the chimney sweep's invoice for the annual chimney cleaning, heating inspection (emission measurement), and the approval of a chimney or stove without differentiating between these activities. The BFH has decided that not only sweeping, maintenance, and repair work by the chimney sweep is eligible, but also the inspection of a system's functionality is considered an eligible craftsmen's service for which a tax reduction under § 35a EStG is to be granted. Eligible activities include both the inspection of the system's functionality and preventive measures to avert damage or even eliminate existing damage. What applied in the court case for the leak test of the sewage pipe equally applies to the inspection of the chimney and the fireplace inspection (BFH ruling of 6.11.2014, VI R 1/13).

(2022): How are chimney sweep fees taken into account?

Are extensions to living space also eligible for tax relief?

Expenses for tradesmen's services in owner-occupied property are directly deductible from the tax liability at 20%, up to a maximum of 1.200 Euro per year. This includes not only regular renovation work but also one-off maintenance and modernisation measures - and not just in the home, but also on the property (§ 35a para. 3 EStG).

Not eligible are tradesmen's activities as part of a new construction measure: Until 2014, new construction measures were defined as "all measures related to the creation or extension of usable or living space" (BMF letter dated 15.2.2010, BStBl. 2010 I p. 140, para. 20). This includes work for a new build, extension, conversion, or addition, as these always involve an extension or creation of usable or living space.

Since 2014, the term "new construction measure" has been redefined: Since then, a new construction measure includes "all work related to the construction of a household until its completion" (BMF letter dated 10.1.2014, BStBl. 2014 I p. 75, para. 21).

What does "completion" mean? A building is completed when the essential construction work is finished and the building is erected to the extent that moving into the apartments is reasonable or the building can be used for its intended purpose in all essential areas. All work thereafter is eligible. This also benefits builders who move into their new build first and have work carried out later.

What does "construction of a household" mean? All work in an existing household is now eligible. It no longer matters if new living or usable space is created. If the building measures significantly improve the utility value of the property, this does not affect the tax benefit. The new definition of "new construction measure" applies retroactively to all open tax cases since 2006 (BMF letter dated 10.1.2014, BStBl. 2014 I p. 75, para. 57).

Is "construction expenditure" also eligible? When assessing eligible work, it does not matter whether it is classified for tax purposes as maintenance expenditure or construction expenditure. The latter applies when something new, previously non-existent, is created. Therefore, the labour costs for the subsequent installation of a tiled stove and chimney, the installation of a sun awning, the initial landscaping of a garden, planting a hedge, or building a boundary wall are also eligible.

Unlike before 2013, since 2014, building measures that expand living or usable space are also eligible - provided a household exists.

Examples of eligible work include:

• Extension of a conservatory: Rejected before 2014 because the unheated conservatory is included in the calculation of living space at 50% and the heated conservatory at 100% (FG Rheinland-Pfalz dated 18.10.2012, 4 K 1933/12).
• Installation of a dormer: Rejected before 2014 because this increases the clear height to over 2 m, thus enlarging the corresponding floor area by 50%. A living space extension of just 2.40 sqm was detrimental (FG Berlin-Brandenburg dated 11.12.2012, 4 K 4361/08).
• Conversion of the attic or basement.
• Installation of a terrace roof.
• Installation of a prefabricated garage.

Note: The Berlin-Brandenburg Finance Court ruled against homeowners, stating that tradesmen's services are still considered part of the new build if they were carried out after moving in but were already listed in the construction contract: Examples include exterior plastering and painting, laying turf, and erecting a fence (judgment dated 7.11.2017, 6 K 6199/16).

Currently, the Federal Fiscal Court has denied the tax benefit under § 35a para. 3 EStG for structural calculations by a structural engineer. This applies even if the structural calculation was necessary for carrying out a tradesman's service (BFH judgment dated 4.11.2021, VI R 29/19).

(2022): Are extensions to living space also eligible for tax relief?

Do tradespeople need to itemise the wage portion separately?

Customers are generally entitled to a correct invoice. This also includes the requirement for tradespeople to itemise the labour costs separately on the invoice. If these are tradespeople's services, it can lead to tax savings.

Expenditure on tradespeople's services is directly deductible from the tax liability at 20%, up to a maximum of 1.200 Euro per year. Only pure labour costs and any invoiced machine and travel costs plus the applicable VAT are eligible. In addition to the aforementioned pure labour costs, costs for disposals considered ancillary to the main service (e.g. removal of tiles during bathroom retiling) and invoiced costs for consumables (e.g. tape, protective sheets, lubricants) are also eligible. However, costs for materials and other supplied goods are not eligible.

Labour costs must be ascertainable from the details in the invoice. The question is whether the customer has a legal right for the tradesperson to itemise the labour costs separately on the invoice.

Currently, the Mülheim District Court has ruled that customers have a legal right to an itemised invoice with separate disclosure of labour costs. This is because only then can they deduct tradespeople's services or household-related services for tax purposes in accordance with § 35a para. 2 EStG. So, that's settled! (Mülheim District Court, 30.7.2015, 12 C 1124/14).

The company's obligation arises from § 242 BGB, not to harm the contractual partner. Regarding the tax implications of invoicing, it is also irrelevant whether the client can specify the invoice amount themselves. As long as the company withholds the invoice, the client can even withhold payment under § 273 BGB, as the private legal claim to an invoice is a secondary obligation of the service provider to the paying service recipient.

Note: There are always service providers who demand cash payment. On the other hand, there are also clients who pay an invoice in cash - possibly unaware of § 35a EStG. In these cases, the tax office will refuse the deduction as a household-related service or tradespeople's service - no amount of complaining will help. CURRENTLY, the Eisenhüttenstadt District Court has ruled that the client has no claim for reimbursement against the service provider for the amount of the lost tax reduction (judgment of 8.3.2021, 5 C 65/20).

In the case in question, a taxpayer had hired a moving company for a private move and paid the invoice in cash. After not receiving a tax reduction, he demanded a refund from the moving company. However, according to the court, the company is neither obliged to encourage its customers to make non-cash payments nor to inform them about tax consequences. As part of their own responsibility, the client must take care of their own tax matters (Source: Trinks, NWB Expertenblog, "Handwerker & Co. haftbar für Steuerschaden durch Barzahlung?").

(2022): Do tradespeople need to itemise the wage portion separately?

Are preliminary work in the craft business also eligible?

Expenses for craftsmen's services are deductible from the tax liability at 20%, up to a maximum of 1.200 Euro per year. Only labour costs are eligible, and only for work on and in the owner-occupied home. For a long time, it was unclear to what extent work carried out in the workshop of the craftsman's business was also eligible.

Recently, the Federal Fiscal Court decided the matter: If work is carried out in a craftsman's workshop, the wage costs incurred are not eligible for relief under § 35a para. 3 EStG (BFH rulings of 13.5.2020, VI R 4/18 and VI R 7/18).

According to the BFH, services provided outside the household are not eligible, even if they are provided for the household. What matters is where the service is actually performed. A craftsman's service carried out in the craftsman's workshop on a household item does not have a (direct) spatial connection with the household for which it is provided, but only a functional one.

Therefore, it is generally irrelevant whether the service result is achieved in the household. The spatial-functional connection to the household cannot be established solely by the fact that the craftsman's service relates to a household item.

The first case concerned the repair of a courtyard gate, which was removed by the carpenter, repaired in his workshop, and then reinstalled. A tax reduction for the repair of the courtyard gate is only possible to the extent that the carpenter carried out the work on the property and not in his workshop (VI R 4/18).

The second case involved the manufacture, galvanisation, delivery, and installation of a door (workshop and installation work). There is no tax relief for the manufacture and galvanisation of the door in the workshop, only partially for the installation work in the household (VI R 7/18).

Ensure that the labour costs for the on-site service (installation) are itemised separately on the invoice. However, even if this is not the case, the labour costs can be apportioned on an estimated basis. According to the BFH, "it is actually possible to split the labour costs into a non-eligible 'workshop wage' and an eligible 'on-site wage'. Such a split does not contradict the legislative intent to combat undeclared work" (VI R 4/18, VI R 7/18).

(2022): Are preliminary work in the craft business also eligible?

Is the connection to the sewage disposal system eligible for tax relief?

Expenses for craftsmen's services are directly deductible from the tax liability at 20%, up to a maximum of 1.200 Euro per year. Only labour costs and any invoiced machine and travel costs plus VAT are eligible.

However, the tax deduction is only granted for work on and in the self-used property. While the tax authorities only want to subsidise measures within the property boundaries, the Federal Fiscal Court considers the necessary connection to the household to still exist if the measure exceeds the property boundary and exclusively serves the property (BFH ruling of 20.3.2014, VI R 56/12).

Currently, the Federal Fiscal Court has ruled as follows: The spatial-functional connection to the taxpayer's household required by § 35a EStG is not present if a construction cost subsidy is charged for the new installation of a public combined water pipe as part of the public collection network (BFH ruling of 21.2.2018, VI R 18/16).

It is therefore necessary to distinguish whether the public supply or disposal network is being created or renewed for the first time (= not tax-privileged) or whether the home is being connected to the public collection network (= tax-privileged). The actual property connection to the public collection network begins at the branch point from the respective collection pipe and ends with the property connection shaft at the property boundary. Unlike the house or property connection, the public supply or disposal network is no longer considered part of the household within the meaning of § 35a para. 4 sentence 1 EStG.

The question of whether residents' contributions for a municipal road or for the development of pavements and street lighting could also be eligible had not yet been decided by the highest court. The Federal Fiscal Court has now ruled that residents' contributions for the development of a public road do not constitute eligible craftsmen's services and are therefore not tax-privileged under § 35a para. 3 EStG (BFH ruling of 28.4.2020, VI R 50/17).

The case: A couple had to pay a contribution to the municipality for the development of the unpaved sand road in front of their property and wanted to deduct part of it as a tax-privileged craftsmen's service from their income tax. As the advance payment notice from the municipality only showed a total amount, they estimated the labour costs at 50%. The tax office did not recognise the expenses for the construction of the road. The couple argued that the principles established by the BFH for the consideration of the connection to the public water supply should also be applied to the development of the municipal road, as the transport connection to the school and workplace was necessary for household management.

According to the BFH, the work on the road - as opposed to work on an individual property access from the branch off the main road - is not property-related and therefore not household-related. General road construction is no longer considered a craftsmen's service provided in the household. This is because services in general road construction benefit not only individual property owners but all users. The fact that road construction is also "economically advantageous" for the individual property owner is irrelevant in this respect.

Billing based on the property area and a usage factor does not change the lack of a spatial-functional relationship to the household. This merely serves to distribute the total costs remaining after deduction of the municipal share among the contributors and does not mean that the individual resident pays for the section of road in front of their property.

Even small businesses within the meaning of § 19 UStG or public authorities can provide tax-privileged craftsmen's services. This is particularly the case if a legal entity under public law (e.g. a special-purpose association) has acted entrepreneurially by laying house connection pipes against cost reimbursement as part of a commercial operation.

The BMF recently decreed (BMF letter of 1.9.2021, IV C 8 - S 2296-b/21/10002 :001):

For craftsmen's services provided by public authorities that benefit not only individual households but all households involved in the public authority's measures, a benefit under § 35a EStG is excluded. In this respect, there is no spatial-functional connection between the craftsmen's services and the household of the individual property owner. This applies, for example, to the expansion of the general supply network or the development of a road. This position corresponds to the BFH ruling of 28.4.2020 (VI R 50/17).

(2022): Is the connection to the sewage disposal system eligible for tax relief?

Are residents' contributions also tax-privileged?

Expenses for craftsmen's services are directly deductible from the tax liability at 20%, up to a maximum of 1.200 Euro per year. Eligible are works in the owner-occupied home or "in the household" as well as on the property. But are contributions for road renovation also eligible?

Consequently, the tax authorities only want to grant the tax relief for house connections (TV, internet), supply and disposal lines (electricity, gas, water), drain cleaning, sewage disposal, leaf removal, outdoor facilities, paving work, etc. within the property boundary and reject it for measures outside the property (BMF letter dated 10.1.2014, BStBl. 2014 I p. 75, para. 15, Annex 1).

However, the Federal Fiscal Court ruled against the tax authorities, stating that the tax benefit is not limited to services provided exactly within the property boundaries. The necessary connection to the household is still present if it is a measure that extends beyond the property boundary and exclusively serves the property. According to the BFH judges, not only are craftsmen's services that are provided "in" a household eligible, but also those provided "for" the household.

This is because the term "in the household" is to be interpreted spatially-functionally. Therefore, the boundaries of the household - contrary to the tax authorities' opinion - are not exclusively defined by the property boundaries. Rather, craftsmen's services carried out beyond the property boundary on third-party or public land can also be eligible. However, these must be services carried out in the immediate spatial vicinity of the household and serving the household (BFH judgment of 20.3.2014, VI R 56/12).

The question of whether contributions for a municipal road or for the expansion of pavements and street lighting can also be eligible had not yet been decided by the highest court. The Federal Fiscal Court has unfortunately recently ruled that contributions for the expansion of a public road do not constitute eligible craftsmen's services and are therefore not eligible for tax relief under § 35a (3) EStG (BFH judgment of 28.4.2020, VI R 50/17).

The case: A couple had to pay a contribution to the municipality for the development of the unpaved sand road in front of their property and wanted to deduct part of it as a tax-privileged craftsmen's service from their income tax. As the advance payment notice from the municipality only showed a total amount, they estimated the labour costs at 50%. The tax office did not recognise the expenses for the construction of the road. The couple argued that the principles established by the BFH for the consideration of the connection to the public water supply should also be applied to the development of the municipal road, as the transport connection to the school and workplace was necessary for household management.

According to the BFH, the work on the road - as opposed to work on an individual property access road from the junction with the main road - is not property-related and therefore not household-related. General road construction is no longer considered a craftsmen's service provided in the household. This is because services in general road construction benefit not only individual property owners but all users. The fact that road construction is also "economically advantageous" for the individual property owner is irrelevant in this respect.

The billing based on the property area and a usage factor does not change the lack of a spatial-functional relationship to the household. This merely serves to distribute the total costs remaining after deduction of the municipal share among the contributors and does not mean that the individual resident pays for the section of road in front of their property.

The BMF recently decreed (BMF letter dated 1.9.2021, IV C 8 - S 2296-b/21/10002 :001):

For craftsmen's services provided by public authorities that benefit not only individual households but all households involved in the public measures, a benefit under § 35a EStG is excluded. In this respect, there is no spatial-functional connection between the craftsmen's services and the household of the individual property owner. This applies, for example, to the expansion of the general supply network or the development of a road. This position corresponds to the BFH judgment of 28.4.2020 (VI R 50/17).

(2022): Are residents' contributions also tax-privileged?