Are extensions to living space also eligible for tax relief?

Tradesmen's services in your own home or on the property are tax-deductible at 20% of the labour costs, up to a maximum of 1.200 Euro per year (§ 35a para. 3 EStG). This includes not only regular renovations but also one-off maintenance and modernisation measures.

What is not included? – New building measures

Services provided as part of a new building measure are not eligible. Until 2014, all work to create or expand living or usable space was considered new construction (e.g. extension, conversion, addition).

Since 2014, a new building measure includes all work up to the completion of the household (BMF letter dated 10.01.2014, BStBl. I p. 75). Tradesmen's services carried out after this can be eligible for tax relief.

Completion is when the building is ready for occupancy or operational use. Work carried out after moving in is therefore eligible – even if the household is newly established by moving in.

Extension of living space: Now eligible

Since 2014, it is no longer decisive whether living or usable space is extended – provided a household exists. A sustainable improvement in utility value is also permissible.

Examples of eligible measures:

Extension of a conservatory
Installation of a dormer window
Conversion of attic or basement
Installation of a terrace roof
Construction of a prefabricated garage

Production costs may be eligible

Whether the measures are considered production or maintenance costs is irrelevant for the tax deduction. Labour costs may also be deductible for initial production, e.g.:

Installation of a fireplace or tiled stove
Landscaping
Planting a hedge
Building a boundary wall

Restrictions: Building contract decisive

Services included in the building contract are considered part of the new building measure – even if they are carried out after moving in. According to the Berlin-Brandenburg Fiscal Court, this includes, for example:

Exterior plastering and painting
Laying of turf
Construction of a fence system

(Judgment of 07.11.2017, 6 K 6199/16)

Not eligible: Planning services

The Federal Fiscal Court has clarified that structural calculations do not count as eligible tradesmen's services – even if they are necessary for the execution (BFH judgment of 04.11.2021, VI R 29/19).

Special feature: Maintenance of photovoltaic systems

Since 2022, maintenance costs for small photovoltaic systems (§ 35a EStG) are eligible – despite the lack of deductibility as business expenses. Requirements: