WHAT IS CONSIDERED MAINTENANCE OF TWO HOUSEHOLDS (doppelte Haushaltsführung)?
Are you an employee with a second home near your place of work, because it would be too far to commute daily from your main residence to your place of work?
This way you can deduct all the expenses from having two households as advertising costs (Werbungskosten) from your taxes. However, the biggest requirement here is that there are additional accommodations at the main residence. The main residence has to be the “center of life”. That means your main residence is in the town where your family and friends live. If there are two households, up to €1,000 can be deducted from your taxes for the second residence (rent and utilities). In addition, trips to your hometown or expenses for furniture etc. can be deducted.
REQUIREMENTS FOR HAVING DOUBLE HOUSEHOLDS (doppelte Haushaltsführung)
Running two households (doppelte Haushaltsführung) is connected with specific criteria. In order for the tax office to accept the deductions for two households, the following five points have to be taken into account:
- The second residence (even a room in a shared house) has to be used for an occupational purposes.
- If you can reach your place of work faster from the second residence than you could from the main residence.
- Outside of the place of work, there is another home that is your main residence.
- The main residence is the center of your life.
- Financial investment in the home that is the main residence. >> Since 2014, you have to prove that you pay for the household expenses of the main residence and they have to amount to more than 10% of the total costs.
WHICH COSTS CAN BE DEDUCTED FROM YOUR TAXES FOR A SECOND RESIDENCE?
- Rent and utilities: (monthly rent, electric, gas and water) can be deducted up to €1,000/month from your taxes.
- Taxes from the second residence (Zweitwohnsitzsteuer): Many cities impose a tax on a second residence. This can be completely deducted.
- Broadcast licensing fee (Rundfunkbeitrag): This is a fee of about €17,50/month for the use of public radio/television and this fee can be completely deducted from the taxes.
ADDITIONAL DEDUCTIBLE COSTS FOR DOUBLE HOUSEHOLDS (doppelte Haushaltsführung)
If there is a second residence near the place of work, a whole row of additional costs can be deducted as advertising costs (Werbungskosten). The following advertising costs are limited to a monthly maximum amount of €1,000 and are calculated on top of the deductions for accommodations.
HOMEWARD BOUND (Heimfahrten)
At the start and end of running two households (doppelte Haushaltsführung), you can completely deduct trip expenses (Fahrtkosten) in relation to driving from one residence to another residence (maximum two trips) or alternatively, they can deduct €0.30/km driven with the flatrate.
Even the cost from the weekly drive home to the main residence can be deducted as well. The tax office can guarantee a €0.30/km commuters tax flatrate (Entfernungspauschale) and you must not submit receipts for this.
Note: Those who do not commute back to their main residence every weekend, can also deduct telephone costs with friends and family. Employees can also use the telephone/internet flatrate of €20.00/month.
The cost for moving from your hometown to your second residence can be completely deducted from your taxes if you provide receipts for everything. The moving cost flat rate (Umzugskostenpauschale) of €730 (in 2016) cannot be deducted for the second household.
ADDITIONAL MEAL ALLOWANCE (Verpflegungsmehraufwand)
You can deduct the flat rate amount (Verpflegungsmehraufwand) from your taxes for the first three months after moving into the second residence. You can receive a flat rate (Pauschale) of €24.00/day.
FURNITURE AND FIXTURES
The basic furnishings of a second residence can be deducted if the use is limited to a normal amount. Specifically, your bed, desk, sofa, washing machine, stove and lighting are included in “basic furnishings.” If the cost of each individual piece of furniture or appliance does not exceed €410.00 (and/or €487.90 gross), then it can be completely deducted immediately. Higher amounts can be split up and deducted over a longer period of time.