SteuerGo FAQs

(2023) How far may the second home be from the place of work?

A second household exists if you are employed outside your main residence and also live at the external place of employment. It is permissible for the second home to be located outside this place but within its catchment area. The catchment area is the region from which commuters usually travel to the workplace daily. Daily commuting must be possible.

But the question is how far the second home can be from the place of employment for the rental costs to be recognised.

The Federal Fiscal Court has deemed it permissible for the second home to be 141 km from the place of employment. The special feature in this case was that the employee had acquired property at the original place of work, and the employer then relocated the company headquarters, so the employee commuted daily the 141 km to the new company headquarters. Here, it was possible to visit the workplace daily by train. The ICE journey took one hour, and such a time expenditure is quite usual (BFH ruling of 19.4.2012, VI R 59/11).

The Federal Fiscal Court has ruled that the second home is still within the catchment area of the place of employment if the distance is 83 km and the workplace can be reached in less than an hour. For the recognition of the second household, it is also irrelevant if the distance between the second home and the family home is significantly shorter at 47 km. The decisive factor here is that a distance of 83 km and a travel time of less than an hour is a usual commuting distance and time (BFH ruling of 26.6.2014, VI R 59/13).

In the case, it was not possible to reach the place of employment from the main residence in a reasonable manner. The route was heavily affected by construction and traffic jams, so daily commuting with travel times of up to two hours per route was unreasonable, and the use of a second home at the place of employment was indicated. The travel time from the second home was less than an hour.

Legal situation from 2014: It is now regulated how far the second home may be from the external place of employment (first place of work): The second home is still within the catchment area of the place of employment if the distance from the second home to the place of work is less than half the distance between the main residence and the place of work. However, the Federal Ministry of Finance has once again revised its principles for recognising a second household (BMF letter of 25.11.2020, BStBl 2020 I p. 1228 para. 100 ff.):

• If the employee can still reach their first place of work, i.e. their place of employment, in a reasonable time from their main residence, any existing second home is irrelevant for tax purposes. A second household is then not recognised. A travel time of up to one hour per route, based on individual traffic connections and travel times, can generally be considered reasonable.
• If the distance between the main residence and the first place of work is more than 50 km and the second home is at the place of employment, it is assumed for simplification purposes that the second home is for work-related reasons. Consequence: The costs of the second household can be claimed as business expenses if the other conditions are met. This includes, in particular, that the employee actually contributes financially to the costs of the household in their home country.

When it was previously mentioned that the second home must be at the external place of employment, more precisely at the first place of work, this is the standard case. However, the second home may also be located outside this place in exceptional cases. The tax authorities state:

• For simplification purposes, it can be assumed that the second home is still at the location of the first place of work if the shortest road connection between the second home or accommodation and the first place of work is no more than 50 km.
• If the second home is more than 50 km from the first place of work, it must be checked whether the first place of work can still be reached daily from the second home or accommodation in a reasonable manner. A travel time of up to one hour per route, based on individual traffic connections and travel times, is considered reasonable.

In practice, employees often make compromises: On the one hand, they want to move closer to their place of employment to make daily commuting more bearable. On the other hand, they do not want to be so far from their home town that "home trips during the week" would be too time-consuming. Therefore, they choose their second residence somewhere between home and work. In these cases, some calculations are necessary:

• For simplification purposes, it can be assumed that the second home or accommodation is for work-related reasons,
• if the distance from the second home to work is less than half the distance between the main residence and the workplace, or
• if the travel time to the first place of work is halved for one route.
• The shortest road connection is decisive for checking the distance.
• If the conditions of this simplification rule are not met, the employee must demonstrate the existence of a work-related second household in another way based on the specific circumstances of the individual case.
• When work or workplace is mentioned, this specifically refers to the so-called first place of work.