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 tax-reducing, also within the specified maximum amounts.

With the service charge statement for the flat, you can save a lot 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 a corresponding 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.

The Federal Fiscal Court recently confirmed that tenants can claim expenses for household-related services and tradesmen's services in accordance with § 35a EStG to reduce tax, even if they have not personally concluded the contracts (BFH ruling of 20.4.2023, VI R 24/20). In the event that the tax office requests proof, it is advisable to request a certificate from the landlord in accordance with Appendix 2 of the BMF letter dated 9.11.2016.

If the landlord refuses to provide the certificate or requests additional proof, such as copies of tradesmen's invoices, reference can be made to the right to inspect documents, which exists according to § 259 para. 1 BGB in accordance with the established case law of the Federal Court of Justice. The tenant can inspect, photograph, scan or copy the documents. For price-controlled residential tenancies, § 29 para. 2 sentence 1 of the Regulation on the Determination of the Permissible Rent for Price-Controlled Dwellings even allows copies to be made against reimbursement of costs (BGH ruling of 8.3.2006, VIII ZR 78/05).

(2023): Can I also claim the tax reduction as a tenant?

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 2023 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 2022 – and claim these costs in the tax year 2023. All tenants and property owners who have not yet received the current certificate according to § 35 a EStG for 2023 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 ruling of the BFH 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 on their own debt, are the costs deductible. If, on the other hand, payment is made on 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.

(2023): What evidence is required?

Which expenses are eligible?

Eligible expenses include gross wages or salary (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).

(2023): Which expenses are eligible?

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 multiple 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 homeowners: Homeowners who use their own property 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 cannot currently be considered as a household-related service in your tax return. This is based on a ruling by the Cologne Tax Court on 26 January 2011 (4 K 1483/10, EFG 2011 p. 978 no. 11).

The reason for this is that the main service is not provided within your property boundaries. The actual service is not the collection of the waste, but its subsequent disposal and processing. The emptying and transport of the waste are considered supporting activities. The Münster Tax Court recently confirmed this view (ruling of 24 February 2022, 6 K 1946/21 E). However, an appeal was rejected for procedural reasons, not on substantive grounds. This means that the issue has not yet been definitively clarified.

(2023): Requirements for all tax reductions