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?
What other costs are deductible for a second household?
If the conditions for maintaining a second household are met, various work-related expenses can be claimed for tax purposes. This begins with the search for accommodation. Expenses related to the search for accommodation, such as travel costs for viewing properties, telephone or postage fees, can be deducted as work-related expenses.
The tax office also recognises the costs for the move. These include, among others:
- Transport costs for a removal company or
- a rental vehicle and also
- travel expenses on the day of the move.
Furthermore, the rent and ancillary rental costs, such as heating or electricity, for the second home can be deducted. Expenses for necessary furnishings can also be deducted.
These include, for example:
- table,
- bed,
- wardrobe,
- kitchen and bathroom furnishings,
- dishes and pots,
- coffee machine,
- vacuum cleaner, as well as
- table and bed linen.
Also deductible are:
- second home tax,
- expenses for renovating the second home before moving in and when moving out, and
- damage costs resulting from an accident that occurs on a journey home.
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.
(2022): What other costs are deductible for a second household?
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?
