(2023)
Are the costs for a nursing home also recognised for tax purposes?
If you move into a retirement home, retirement residence or senior citizens' residence due to age, without being ill or in need of care, the costs are not recognised for tax reduction purposes. These are considered living expenses. According to the Federal Fiscal Court (BFH), such expenses are not extraordinary in nature or reason, as they also apply to other elderly taxpayers in similar circumstances. It is not extraordinary for someone to live in a retirement home because they can no longer or do not wish to care for themselves.
If care needs arise at a later date, the home and care costs can be fully deducted as extraordinary expenses in accordance with § 33 EStG from that point onwards, with the tax office applying a reasonable burden (BMF letter dated 20.1.2003, BStBl. 2003 I p. 89). See below d).
If the costs of the retirement home include a flat rate for basic care, this portion cannot be deducted from the home costs and claimed as an extraordinary expense. However, if specific care services are provided on request or as needed and are invoiced separately on a monthly basis, independently of a flat rate, this amount can be deducted as extraordinary expenses - subject to the reasonable burden. These are direct medical expenses.
