(2022)
When can single people claim dual household maintenance?
Single individuals can also claim the costs of maintaining a second household as business expenses. One of the requirements is that they maintain their own household.
An own household is a furnished apartment,
- which represents the centre of your life interests,
- which you use by your own right or a derived right,
- in which you "maintain" or co-maintain a household, i.e. determine or significantly co-determine the household management,
- and financially contribute to the household costs (new from 2014).
Of particular importance is the question of whether you use the apartment free of charge or for a fee and whether you financially contribute to the household management. An "own household" in the case of a second household is only recognised if the single employee financially contributes to the household costs (§ 9 Abs. 1 Nr. 5 EStG 2014).
It is not sufficient if the employee, for example, only occupies one or more rooms in their parents' household or if the employee is allowed to use an apartment in their parents' house free of charge. It is required that the financial contribution to the household management costs is not merely trivial amounts (BMF letter dated 24.10.2014, BStBl. 2014 I p. 1412, para. 100).
- If the cash payments exceed 10% of the regularly incurred monthly running costs of the household management (e.g. rent, ancillary rental costs, costs for food and other daily necessities), it is assumed that the financial contribution is above the trivial limit.
- If the cash payments are less than 10% of the running household costs, the employee can demonstrate sufficient financial participation in other ways, e.g. financing joint holidays, car costs or major purchases.
- How should a single person demonstrate their financial contribution to the household management in the tax return? As there is no query line for this in the tax form, they should simply wait for a possible enquiry from the tax office.
The Lower Saxony Finance Court has ruled that regular participation in the ongoing housing and consumption costs is not required, as neither the wording of the law nor the legislative materials indicate this (judgment of 18.9.2019, 9 K 209/18).
The case: The claimant rented an apartment at his place of work. He also lived in a non-self-contained apartment in the upper floor of his parents' house with his brother. There is no rental contract for this apartment. In his tax return, the claimant stated that he had contributed a total of 3,160.47 Euro to his parents' household in 2015. He detailed and proved with credit card statements that he had made grocery purchases throughout the year. He also provided bank statements for a transfer of 1,200 Euro (purpose: ancillary costs/telecommunications) and a transfer of 550 Euro (purpose: share of new windows in 2015) to his father. Both bank statements were dated December 2015. However, the tax office did not consider this sufficient proof of financial participation and rejected the deduction of costs for the second household. The claimant had not demonstrated the amount of regularly incurred monthly living costs for the household management. However, the action against this was successful.
Reasoning of the court: In the case in dispute, the claimant had financially contributed to the living costs of the parental household through the one-off payments in December and the documented grocery purchases. The timing of the payment (beginning, middle or end of the respective year) was irrelevant. Financial amounts paid at the end of the year can also be sufficient. Contrary to the opinion of the tax authorities, an even participation in the monthly running expenses for rent etc. cannot be required. Therefore, payments made at the end of the year should not only be partially considered - after a twelfth - but rather in full.
The judges even consider the inclusion of payments outside the year in dispute to be conceivable, provided the payments have their economic cause in the respective year in dispute (e.g. participation in ancillary costs after presentation of the ancillary cost statement in the following year).
Even if the judgment contains many positive statements, a tightening compared to the general opinion can be seen: Living costs are understood to be (only) those expenses for the design of private life that have a household reference, essentially rent and house costs, consumption and other ancillary costs, expenses for the purchase and repair of household appliances and items, costs for food and telecommunications costs. However, costs for holidays, cars, leisure activities, health care, clothing, etc. are not included due to lack of household reference.
Tip: An appeal is currently pending against the judgment at the Federal Fiscal Court under the reference number VI R 39/19. If the tax office has rejected a second household for you with the argument of missing cost participation, you should appeal against this and refer to the aforementioned case. If possible, you should not let it come to a dispute at all, but rather set up a standing order and transfer an appropriate amount "participation in rent and house costs" to your parents monthly.
Currently, the Münster Finance Court has ruled that despite the completion of vocational training, the conditions for a second household are not met if the child has rented their own apartment at the place of work but only has a room, the former child or youth room, at home with their parents. Even if they have demonstrably contributed to the costs of their parents' household, this is not sufficient for the recognition of their own household (judgment of 7.10.2020, 13 K 1756/18 E).
