How are building conversion costs due to disability taken into account?
If you are suddenly affected by a disability and wish to continue living in your usual environment, significant alterations to your home may often be necessary. The costs for adapting your home to meet disability needs can be deductible as extraordinary expenses under section 33 of the Income Tax Act, although the tax office will apply a reasonable burden.
This applies to disability-related building measures on an existing building as well as when building a new house. According to the new opinion of the Federal Fiscal Court, it is irrelevant "whether the additional costs due to illness or disability arise in the context of a new build, the modernisation of an old building, or the conversion of an already self-used home or rented flat" (BFH ruling of 24.2.2011, BStBl. 2011 II p. 1012).
Eligible measures include, for example, the construction of a wheelchair ramp, the creation of a barrier-free house entrance, the installation of a disability-friendly bathroom, converting a ground-floor room into a bedroom, the wheelchair-accessible widening of doors, etc.
The expenses for the disability-friendly design of the home are not covered by the disability allowance, as this only covers ongoing and typical additional expenses for the disabled person. Instead, the expenses can be deducted additionally.
According to the new opinion of the Federal Fiscal Court, the tax office can no longer refuse the tax recognition of building costs on the grounds that you would gain an asset. The argument that the building measures are not only beneficial for the disabled person but also for non-disabled people and therefore constitute a marketable advantage is also no longer valid.
Currently, the Federal Fiscal Court has unfortunately ruled that expenses for the creation of a wheelchair-accessible path in the garden of a detached house are not necessary if there is a terrace on the other side of the house that is accessible by wheelchair. Consequently, the expenses cannot be deducted as extraordinary expenses. However, the labour costs can be deducted as a craftsman service at 20 percent (maximum 1,200 Euro) from the tax liability (BFH ruling of 26.10.2022, VI R 25/20, BStBl 2023 II p. 372).
