(2023)
Can tax reductions for household-related services also be claimed in a care home?
The tax relief for household-related services includes:
- Domestic activities that are usually carried out by members of the private household and are performed by a service provider.
- Expenditure on care and support services.
- The tax relief amounts to 20%, up to a maximum of 4,000 Euro per year (according to § 35a para. 2 EStG).
Regarding accommodation in a home, there are two cases:
- Accommodation in a home with own household: The tax relief applies if an independent household is maintained in the home, and services are provided directly in the resident's household and billed individually.
- Accommodation in a home without own household: In this case, expenses are eligible if they are comparable to those for domestic help, but not for care and support services.
It is important to note that the tax relief does not apply to services provided outside the home, rent payments, caretaker, gardener and craftsman services, as well as care and support services outside the own household.
Children can deduct the costs for outpatient care of their parents if they have borne the costs, regardless of whether the care takes place in the household of the carer or the cared-for person. However, the tax deductibility depends on who concluded the care contract.
There is also a distinction between inpatient care (not deductible) and outpatient care (deductible), depending on the contract details.
The costs for a home emergency call system can be tax-deductible, but under certain conditions:
- The costs for a home emergency call system are tax-privileged if the on-call service is provided as part of "assisted living" in a senior residence. These costs can be deducted from the tax liability at 20 percent.
- The costs for a home emergency call system are not tax-privileged if they are outside "assisted living" in a senior residence, i.e., if the client still lives in their own apartment. These costs are not tax-privileged.
A recent decision by the Federal Fiscal Court states that expenses for a home emergency call system that merely establishes contact with a service centre are not tax-privileged as care and support services within the framework of household-related services. This applies if the service is not provided in the client's household. The case concerned a pensioner living alone in her own household using a home emergency call system. The tax office did not recognise the costs because the service was not provided in the pensioner's household, and the Federal Fiscal Court agreed with this view.
The main service of a pure home emergency call system is processing alarms and notifying contacts, the family doctor, care service, etc., by telephone and not calling the emergency service by the pensioner herself. Since this key service is not provided in the pensioner's apartment and thus not in her household, it is not tax-privileged.
