(2023)
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 flat,
- which is the centre of your life interests,
- which you use by your own right or 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 flat free of charge or for a fee and whether you contribute financially to the household management. An "own household" in the case of a second household is only recognised if the single employee contributes financially to the household costs (§ 9 para. 1 no. 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 a flat in their parents' house free of charge. It is required that the financial contribution to the household management is not merely token 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), a financial contribution above the token limit is assumed.
- 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 Fiscal Court ruled in 2019 that a financial contribution by the employee to the main household is sufficient for a second household to be recognised for tax purposes (judgment of 18.9.2019, 9 K 209/18). A financial contribution can be made directly (e.g., cash payments to parents) or indirectly (e.g., costs for household items or renovations). The contribution does not have to be regular, and one-off payments are acceptable.
Recently, the Federal Fiscal Court confirmed the judgment of the Lower Saxony Fiscal Court and rejected the excessive requirements of the tax authorities (BFH judgment of 12.1.2023, VI R 39/19).
A case was described: The claimant had rented a flat at the place of work and lived in a non-self-contained flat in his parents' house together with his brother. A missing rental contract was not considered a problem. The claimant stated that he had contributed a total of 3,160.47 Euro to the household costs in 2015. The tax office refused the deduction because the claimant did not prove that regular monthly costs had been incurred. The claimant's action was successful.
The law requires a financial contribution to the costs of the main household, including the costs of living space and living expenses. One-off payments and irregular costs are sufficient. A financial contribution should be reasonable compared to the actual household costs. However, the amount cannot be determined as a flat rate and depends on the circumstances of the individual case.
It is recommended to lodge an objection if the tax office refuses and to set up monthly payments to avoid disputes. It is advisable to take into account the ten percent limit of the tax authorities by covering more than ten percent of the monthly regular costs of household management.
Note that the Federal Fiscal Court's ruling cannot be applied to cases where younger children go home at weekends and only use their childhood bedroom (BFH judgment of 12.1.2023, VI R 39/19 and Lower Saxony Fiscal Court, judgment of 18.9.2019, 9 K 209/18).
