When are relocation costs recognised despite a small reduction in travel time?

The Cologne Tax Court has issued a remarkable ruling in favour of taxpayers. Although the required travel time saving of at least 1 hour was not achieved, the relocation costs were recognised as business expenses. Relocation costs are tax-deductible if there are professional reasons, such as a change of employer, a transfer, or the occupation or vacating of a company flat.

But did you know that a move can be professionally motivated even if the travel time saving is less than one hour? This is the case if the move leads to a "significant improvement in working conditions".

In the case in question, the workplace was reached on foot in less than 5 minutes after the move. The professional reason was that the accessibility of the workplace without transport led to a significant improvement in working conditions (Cologne Tax Court, 24.2.2016, 3 K 3502/13).

Other factors, such as the elimination of time pressure and stress, played a role. The more convenient handling of transporting heavy luggage was also taken into account. The tax judges emphasised that the private motive of acquiring property is not called into question by the professional reason.

Are you looking for a closer flat to save time and stress on your commute? Even the expenses for the search, if unsuccessful, can sometimes be claimed as (unsuccessful) relocation costs, provided that a daily travel time saving of at least one hour was to be expected (Düsseldorf Tax Court, 24.3.1994, EFG 1994 p. 652).

The Hamburg Tax Court also ruled that relocation costs can be professionally motivated if the move leads to a significant easing of working conditions, without any travel time saving or change of workplace. This can be the case, for example, if a move is made to set up a home office for each spouse (Hamburg Tax Court, judgement of 23.02.2023, 5 K 190/22, appeal VI R 3/23).

When are relocation costs recognised despite a small reduction in travel time?

When can I claim relocation expenses as income-related expenses?

If your relocation is work-related, you can deduct the resulting costs as income-related expenses. A work-related reason is given in the following cases, for example:

• Your employer relocates.
• You move because you have changed employers.
• Your employer has transferred you.
• You significantly reduce the distance between your home and workplace by moving. The daily travel time should be reduced by at least one hour.
• You move into or out of a company flat.
• You move to the place of work to end a second household.

Expenses incurred by the taxpayer for a move to another home to (first) set up a home office are not deductible as income-related expenses (BFH ruling of 05.02.2025, VI R 3/23, BStBl 2025 II p. 650).

When can I claim relocation expenses as income-related expenses?

What relocation expenses can I deduct?

If your move is work-related, you can claim the following expenses as income-related expenses:

Transport costs

• This includes your expenses for a moving company in full for all moving goods. Fees for no-parking signs at the loading or unloading location can also be deducted as transport costs.
• If you move without a freight forwarder, you can deduct the costs for a rental vehicle including mileage allowance, expenses for using your own vehicle at the travel expense rate, and the cost of packaging materials. If you pay wages to friends who help, you can also deduct these expenses.

Travel expenses

• On the moving day, you can claim travel expenses as for an external activity. If you travel by your own vehicle, you can apply the business travel allowance of 30 cents per kilometre. If you use public transport, the tax office accepts the actual costs incurred with proof.
• During the move, you can also claim meal allowances for yourself and your household members moving with you at the rates for external activities as moving expenses. If you can prove accommodation costs incurred from the days of loading to unloading the moving goods, you can also deduct these.

Double rent payments

• If you have to pay double rent due to the notice period of your old rental apartment, even though you already live in the new apartment, you can deduct the rent payments for the old apartment as income-related expenses from the day you move out until the end of the rental period.
• This also applies to additional costs. If you have already rented the new apartment but are not yet living in it, you can deduct the rent payments for the new apartment as income-related expenses.

Furnishings

• Expenses previously covered by allowances for a cooker or stoves for each room of a flat are included in the newly adjusted allowance for other moving expenses (§ 10 BUKG) from 1.6.2020 and are therefore no longer listed separately. In particular, the abolition of allowances for heating stoves is appropriate, as stove heating is outdated and no longer relevant in practice.

Relocation-related tutoring

• If your children need to change schools and tutoring is required, you can deduct the costs.

  

Moving expense allowance for "other moving expenses"

• In addition to these actual costs, there is a moving expense allowance (lump sum for other moving expenses) for which no receipts are required. A table and detailed explanation are provided in the following section.

What relocation expenses can I deduct?

What costs are covered by the relocation allowance?

If you move for work-related reasons, you can deduct the moving expenses as income-related expenses or have them reimbursed tax-free by your employer. These include transport costs, travel expenses, double rent payments, estate agent fees for a rented flat, and other relocation expenses.

While the aforementioned costs can be deducted in the amount proven, other relocation expenses can be claimed with a flat rate - the so-called flat rate for other relocation expenses, also known as the relocation expense allowance.

The Federal Ministry of Finance has recently increased the moving expense allowances for work-related moves as of 01.03.2024 (BMF letter dated 28.12.2023).

The relocation allowance covers

• Tips for movers and other helpers. This also includes, for example, inviting friends to a meal as a thank you for their help with the move.
• Professional assembly and disassembly of lights, fitted kitchens, and other electrical appliances.
• Professional installation and alteration of curtains, blinds, and their fittings.
• Fees for re-registration.
• Advertisements for house hunting, etc.
• Costs for cosmetic repairs in the old flat, provided you are contractually obliged to cover them (but not cosmetic repairs in the new flat, as these are privately incurred).

What costs are covered by the relocation allowance?

Can tutoring for your own children be deducted after a move?

Yes, this is possible – under certain conditions and up to a specified maximum amount. The costs are then considered business expenses as part of a work-related move.

Conditions for tax deductibility

The costs for tuition are tax deductible if the following conditions are met:

• The move is work-related, e.g. due to a transfer, job change or starting a job for the first time.
• There is a change of school for the child, leading to a proven need for tuition.
• The need for tuition must be proven – e.g. with a school certificate or an expert opinion.
• New since 2020: In the case of a change of federal state due to the move, the need for tuition is automatically recognised, as different curricula are assumed.

Amount of deductible costs in 2025

For moves in the tax year 2025:

 Maximum amount for tuition: 1.286 Euro per child (BMF letter dated 28.12.2023 )

The amount can be claimed in full regardless of the actual costs – provided these are not exceeded and the conditions are met.

Example

The Maier family moves in April 2025 for work reasons from Hamburg to Munich. Their daughter attends a new grammar school there. Due to different curricula in Bavaria, she needs tuition in mathematics and English. The family pays 1.500 Euro for professional tuition.

• In the 2025 tax return, 1.286 Euro can be claimed as business expenses as part of the moving costs.
• The amount exceeding this (214 Euro) is not considered for tax purposes.

Proof & entry in the tax return

• Submit a school certificate or an expert opinion to prove the need for tuition.
• Enter the costs in Form N of your tax return under the item “Moving costs” as other moving costs.
• Keep invoices and payment receipts well – the tax office may request them.

Important note on the deadline

The tuition should start soon after the move – ideally within 6 months to credibly demonstrate the connection with the move.

Note the new regulation on flat rate calculation:

For the calculation of the flat rates, the day of the furniture transport is no longer decisive, but the day before the removal goods are loaded. (BMF letter dated 20.05.2020)

Conclusion

For work-related moves in 2025, you can claim tuition costs up to 1.286 Euro per child as business expenses – if the conditions mentioned are met. This supports parents who need to provide their children with additional learning support after a change of school.

Can tutoring for your own children be deducted after a move?