Tax reduction for services and crafts in private households
March 10, 2022
For income tax purposes, the following tax reductions can be claimed in parallel:
- 20% of expenses in private households for household-related employment and household-related services such as lawn mowing, window cleaning or care services, up to a maximum of (20% of €20,000 =) €4,000 p.a. and
- 20% of the expenses for craftsman services, i.e. all renovation, maintenance and modernization measures carried out in one’s own household (20% of € 6,000 =) but not more than € 1,200 p. a.
- Craftsman services are only eligible if they are performed within the spatial area of an existing household. This means that craftsmen’s services that relate to the construction of a “household”, i.e. a new building, are not eligible.
Recommendation for action: For the tax reduction, only the labor portion as well as machinery and travel costs are taken into account, but not the material portion. It should be noted that the tax reduction is only granted on presentation of proof, i.e. an invoice must be available for the service.
The following recent developments should be noted:
- For craftsman services provided by the public sector that benefit not only individual households but all households involved in the measures taken by the public sector, tax relief is excluded. This applies, for example, to the expansion of the general supply network or the development of a road, but also to winter road maintenance.
- The repair of a private vehicle is not a favored craftsman service, as it is not a “household item” - according to the decision of the Thuringia Fiscal Court of June 25, 2020 (Case No. 1 K 103/20).
- It is still disputed whether a tax reduction is granted for expenses for a home emergency call system installed in a household of a taxpayer located outside an “assisted living”.