When is a second household recognised?
To have a second household recognised for tax purposes, you must have your own household at your home location. A household is your main residence, where you have your centre of life and for which you bear the costs, whether as an owner, tenant, or through a right of use (e.g., if you use your partner's flat).
Another condition is that you contribute financially to the costs of the main household. For married couples or families, this is usually not a problem, as the spouse or family lives at home and bears the costs. For single people, the financial contribution is often more strictly checked. The question is when a sufficient financial contribution is made.
In 2019, the Lower Saxony Tax Court ruled that the financial contribution can be made directly or indirectly. This means you can pay money directly or contribute to the costs, for example by purchasing household items or making repairs. Regular payments are not mandatory, and the timing of the payment does not matter. Payments made at the end of the year may be sufficient.
The Federal Fiscal Court has now confirmed the ruling of the Lower Saxony Tax Court and rejected the excessive demands of the tax authorities (BFH ruling of 12.1.2023, VI R 39/19).
The case: A claimant rented a flat at his place of work and lived in a non-self-contained flat in his parents' house with his brother. There was no rental agreement for this flat. The claimant stated that he had contributed a total of 3,160.47 Euro to the household costs in 2015. He provided credit card statements showing continuous grocery purchases throughout the year. He also submitted bank statements for transfers to his father, including 1,200 Euro for utilities/telecommunications and 550 Euro for new windows in 2015. Both bank statements were dated December 2015. The tax office did not accept this as sufficient proof of financial participation and refused to deduct the costs for the second household. The claimant's appeal was successful; the tax office's appeal was dismissed.
Reasoning: To recognise a second household for tax purposes, there must be a financial contribution to the costs of the main household. Living expenses mainly include household and living costs (e.g. rent, operating costs, costs for household items, renovations and maintenance), as well as household management costs (e.g. food, hygiene, telecommunications). Costs for clothing, holidays, leisure and health care are not included. The law does not specify a specific financial limit, and the contribution does not have to be made monthly. The taxpayer must prove the actual costs incurred.
Tip: If the tax office rejects the second household due to a lack of cost sharing, you should appeal and refer to the BFH decision. It is advisable to transfer monthly contributions for rent and household costs to avoid disputes. Note the ten per cent limit of the tax authorities, which states that more than ten per cent of the monthly costs should be covered.
Further notes:
- The BFH and the lower court also dealt with issues such as the independence of the brothers' household and the situation of younger children using a room in their parents' house.
- The BFH ruling does not apply to cases where younger children go home at weekends and only use their youth room (FG Münster, ruling of 7.10.2020, 13 K 1756/18 E).
