Status: 10.12.2023, 12:10 p.m.
By: Anne Hund
Tenants can also deduct certain ancillary costs from their taxes on a pro rata basis, which have been incurred for a craft activity or a household-related service.
For most tenants, the utility bill flutters into the house by 31 December at the latest. It is often associated with an additional payment. But in many cases, there is something to be gained from a tax perspective.
Operating costs: Tax savings also apply retrospectively
Good to know: Even if the 2022 tax return has long since been submitted, the tax savings can still be claimed at a later date, as the German Press Agency (dpa) reports. In most cases, the operating cost statement is not received until late in the following year, but the deadline for submitting the tax return has passed by then. The tax offices would therefore generally accept that the tax reduction is only applied for for the year in which the tenant has also received the utility bill, as Jana Bauer from the Federal Association of Wage Tax Assistance Associations explains, according to the dpa report.
Many tenants dread the annual utility bill because it can be associated with an additional payment. But in many cases, there is something that can be achieved in terms of taxation. © AntonioGuillem/Panthermedia/Imago
Which costs are proportionately tax-deductible?
"Unfortunately, consumption-related costs such as gas, water and electricity are not tax deductible," as the Income Tax Assistance (Lohi) Bavaria has informed in principle in a statement. But there are numerous other ancillary housing costs for which tenants or owners can equally contribute to the tax office. For this reason, it is worthwhile to take a close look at the utility bill and allocate individual amounts to household-related services or craftsmen's services.
The tax return includes "all expenses incurred for cleaning, maintenance, repair or renovation work in the apartment, in common facilities, on the house, in the garden, on the property or adjacent sidewalk," writes the Lohi. "If the costs were paid by bank transfer or direct debit out of your own pocket, they can be claimed for tax purposes." It does not matter whether a payment was made on a pro rata basis to the landlord or to a company.
What are craftsmen's services and what are household-related services?
Especially in apartment buildings, there are numerous technical systems that need to be checked and maintained regularly, according to Lohi Bayern. In addition, the maintenance and management of apartment buildings are often outsourced to external service providers so that the landlord does not have to worry about it on an ongoing basis. Such costs are "usually" passed on by the landlord to the residential parties. Which costs, if any, are deductible on a pro rata basis?
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Fancy a voyage of discovery?
According to the income tax experts, the most common craftsmen's services include:
- Chimney sweep
- Gutter and drain pipe cleaning
- Maintenance of elevators, fire extinguishers and smoke detectors
- Maintenance of electrical, gas and water installations
- Replacement of metering meters
- Removal of graffiti
- Whitening from the stairwell
- Thermal insulation and façade painting
- Repair of water damage
- Cosmetic repairs
Typical examples of household-related services are also the following:
- Janitors, gardeners and building cleaning services
- Cleaning stairwell and common areas
- Mowing the lawn, trimming the hedge and replacing plants
- Leaf removal from pavement and driveways
- Winter service with clearing and gritting of pavements
- Mold & Pest Control
If such or similar expenses are listed in the utility bill, the cost share can be claimed with the tax return, as the experts explain. Costs for 2022 can also be stated in the 2023 tax return, as dpa reports.
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What is the tax saving, if any?
"According to the Income Tax Act, 20 percent of the labor costs, including travel and machinery costs, can be deducted from income tax for craftsmen's services and household-related services up to the maximum amounts applicable in each case," Lohi Bayern explains in principle in its statement. "A tax advantage of a maximum of 1,200 euros per year is possible for craftsmen's services, and 4,000 euros for household-related services."
The costs for materials and disposal are not deductible. "That's why it's important to report the costs for working time, travel, machine use and consumables separately. Only then will it be recognized by the tax office," Lohi also informs.