The tax authorities promote household-related employment, the use of household-related services, care and support services as well as craftsmen's services for renovation, maintenance and modernization measures through tax reductions.
A distinction must be made between:
- Marginal employment or employment in the household subject to social insurance contributions
- Household-related services and care and support services
- Use of handyman services
Household-related employment relationships
When hiring a marginally employed person or an employee subject to social security contributions, the taxpayer using the household-related activities assumes the position of an employer with all the associated obligations. The activity must be closely related to the household. The activities include, for example
- Preparing meals in the household and
- cleaning the home.
The tax benefits vary depending on the type of household-related activity.
In the case of marginal employment, 20% of the expenses, up to a maximum of €510 per year, are subsidized by means of a separate maximum amount. In the case of employment subject to social insurance contributions, the expenses are included in the uniform maximum amount applicable to all household-related services. This amounts to 20% of the expenses, up to a maximum of € 4,000 per year.
Household-related services
Household-related services include activities that are not craft services, are usually carried out by members of the private household and for which third parties are employed or a service agency or an independent service provider is used. This includes the following activities:
- Cleaning of the home (e.g. by employees of a service agency or a self-employed window cleaner)
- Garden maintenance work (e.g. lawn mowing, hedge trimming)
- Preparation of meals in the household and services for privately arranged removals.
Household-related services do not include
- Personal services such as home hairdresser, podiatrist
- Services provided by billing companies for heating energy or water consumption
- Costs for property management and garbage fees
- Security and locking services (property control; provision of an alarm system)
- Clearing out an apartment in the course of a household clearance
The tax reduction for household-related services is 20% of the eligible expenses, up to a maximum of €4,000 per year (uniform maximum amount).
Example:
A commissioned a gardening and landscaping company to trim several hedges and shrubs in March 2024. The labor costs shown on the invoice amounted to € 850. Payment was made by bank transfer on 29.03.2024.The costs for the garden maintenance are tax-privileged to the extent of the labor costs of € 850. The tax reduction is 20% of € 850 = € 170.
Care and support costs
The tax reduction for household-related services also includes expenses incurred for the use of nursing and care services for persons in need of care. Care insurance benefits must be taken into account. These expenses are also taken into account for tax purposes at 20% of the expenses up to the uniform maximum amount of €4,000. Nursing and care services due to accommodation in a residential or nursing home for the elderly are also eligible. It does not matter whether you have your own household in the residential or nursing home.
Example:
V lives with his wife E in their own household. They have hired a mobile care service to assist V with personal hygiene and nutrition. V pays a monthly advance payment of € 325 for the regularly recurring care services. B attaches the correct annual invoice and the bank transfer receipts to his tax return. C receives a reimbursement of expenses for home care from the statutory long-term care insurance in the amount of € 205.The expenses of € 3,900 per year for V's home care are eligible. However, the care insurance benefits of € 2,460 must be taken into account. The tax reduction is
20 % of € 1,440 = € 288.
Handyman services
In addition to the deduction for household-related services, 20% of the expenses for handyman services, up to a maximum of €1,200 per year, can be taken into account.
In particular, the following are eligible tradesmen's activities
- Work on interior and exterior walls,
- Work on the roof, facade, garages, etc,
- Repair or replacement of windows and doors, painting/painting of doors, windows (inside and outside), wall cupboards, radiators and pipes,
- Repair or replacement of floor coverings (e.g. carpeting, parquet, tiles),
- Repair, maintenance or replacement of heating systems, electrical, gas and water installations,
- Modernization or replacement of the fitted kitchen,
- Modernization of the bathroom,
- Repair and maintenance of items in the taxpayer's household (e.g. washing machine, dishwasher, stove, television, PC),
- Garden design measures,
- Paving work on the residential property and
- Inspection expenses (e.g. chimney sweep, inspection of lightning protection systems).
It does not matter whether the expenses for the individual measure are maintenance or construction expenses.
However, craftsmen's work as part of a new construction project is not eligible. New construction measures are all measures carried out in connection with the construction of a household until it is ready for occupancy for the first time, e.g. when building a detached house.
On the other hand, the subsequent conversion of the attic or the subsequent construction of a conservatory in an owner-occupied single-family home, for example, does not constitute a new construction measure, but a preferential measure.
What does not count as tradesman services?
- Jump-starting or repairing a car,
- Preparation of an energy certificate,
- Architectural services for major modernization expenses.
Example
In March 2024, A commissions a plumber to replace the defective heating system and pays the invoice in the amount of € 5,800 by bank transfer in April. At the same time, the plumber repairs the faulty refrigerator in A's household. A pays the invoice of € 200 immediately in cash and receives a receipt for this.
The replacement of the heating system is subsidized. However, the repair of the refrigerator is not, as the invoice was paid in cash. The tax reduction is therefore 20% of € 5,800 = € 1,160. The maximum amount of € 1,200 is not exceeded
Note
The legal basis for income taxation of natural persons is the Income Tax Act (EStG), in particular Section 35a EStG
Further information can also be found in the BMF letter dated 09.11.2016, BStBl I p. 1213 and in the "Current tip - household-related employment relationships"