Deduction of costs for services included in rent – which household services can a tenant deduct from tax?

Many tenants in Germany are unaware that part of the costs included in the rent can be reclaimed in a tax return. This applies, among other things, to stairwell cleaning, caretaker services, snow removal, and selected items shown in the Nebenkostenabrechnung. Correctly claiming such expenses can increase the tax refund by several hundred euros per year. The problem is that most people omit these costs in the return, although invoices for costs of services included in the rent and the tax return often provide a real opportunity for an additional deduction. 

Which rent-related costs can be deducted for tax purposes?

The tenant can deduct from tax primarily the costs of household services and work carried out around the property. This refers to expenses that appear in the additional charges statement and relate to actual work performed by people.

In practice, these are most often costs associated with the maintenance of the building and common areas. The German tax office classifies them as so-called haushaltsnahe Dienstleistungen and Handwerkerleistungen. It is precisely these items that can significantly reduce tax liability.

The following costs are most often deductible:

• stairwell cleaning,
• caretaker services,
• snow removal from sidewalks,
• greenery maintenance,
• chimney cleaning,
• elevator maintenance,
• cleaning of common-area windows,
• heating system servicing,
• plumbing and electrical work.

In the annual settlement, the property owner should itemize the entries related to labor. These are precisely the items that are most relevant for the Finanzamt. Materials cannot be deducted, but the service itself, such as installation, cleaning, or maintenance, can be taken into account in the return.

Deducting utility bills – which charges matter?

Not all utilities can be deducted, but part of the costs associated with their service can be. This is a very important distinction, because many tenants incorrectly assume that electricity or internet automatically reduce tax. In reality, the tax office is primarily interested in the cost of the service performed, not in the mere consumption of utilities.

Therefore:

• electricity consumption is usually not deductible,
• heating consumption costs are generally not deductible,
• but maintenance of the heating system is,
• meter readings may be partially recognized,
• cleaning of the system or boiler servicing often qualifies for the relief.

For this reason, deducting bills for services included in the rent requires a careful review of the documents from the landlord or housing association. In the German Nebenkostenabrechnung there are often items listed under general names such as Wartung Heizungsanlage, Hausmeisterservice, Winterdienst or Treppenhausreinigung, and these are precisely the items that can increase the tax refund. In practice, some tenants recover 200, 400, and sometimes even more than 1,000 euros per year. Much depends on the standard of the building and the amount of administrative costs – in modern apartment buildings with an elevator, underground garage, and cleaning company, the total possible deductions can be very high indeed. 

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Received a Nebenkostenabrechnung without any breakdown of costs qualifying under § 35a? Do not write off the deduction immediately. Write to the Vermieter or Hausverwaltung and specifically request a „Bescheinigung nach § 35a EStG”. This is much more effective than asking in general for a „tax document”. Such a document makes it possible to quickly identify amounts for cleaning, garden work, caretaker services, or tradespeople, which are often hidden under collective items in the standard settlement of costs.

Bills for services included in the rent and the tax return – how should they be reported correctly?

The most important issue is the correct allocation of costs to the relevant sections in the tax return. Without this, the tax office may reject the relief or request additional documents. In practice, rent-related expenses are usually entered in sections concerning household services, tradespeople services, and household-related costs. In the ELSTER system, the relevant fields are usually found in the Haushaltsnahe Dienstleistungen and Handwerkerleistungen sections, and this is where the data from the annual rent statement is entered. It should also be remembered that the Finanzamt recognizes only non-cash payments – if the service was paid in cash, the tax office may refuse to take the cost into account.

A good practice is to keep all documents related to the apartment, above all the annual rent statement, invoices, bank transfer confirmations, and correspondence from the property owner. Although in most cases they do not need to be attached to the return immediately, the tax office may request the documentation even several years later. The German tax system is now more digital than a decade ago, but it still examines deductions related to property and housing maintenance costs very carefully.

Tradespeople services and repairs – what can be included as expenses?

The tenant can also deduct part of the costs of repair services carried out in the building, although this applies primarily to labor and not to building materials. This is particularly important in older properties where repairs to installations, maintenance work, or replacement of technical equipment are carried out regularly. The costs most often recognized by the Finanzamt include m.in. plumbing work, heating servicing, electrical repairs, elevator maintenance, door and window repairs, and chimney sweep services. In practice, the building owner settles these expenses through additional charges, and the portion allocated to the tenant is then included in the annual cost statement.

That is precisely why ancillary cost statements, bills related to apartment maintenance, and documents from the landlord should be carefully reviewed before submitting the tax return. Very often they contain items that make it possible to recover additional money, especially if they relate to services performed in the household. German tax rules provide specific tax relief limits – in the case of household services 20% of the incurred costs can be deducted from the tax, up to a maximum of EUR 4,000 per year, while for services provided by tradespeople 20% of the labor costs is deductible, up to a maximum of EUR 1,200 per year. As a result, even a standard tenant can effectively reduce tax liability, despite not running a business or owning real estate. 

The most common mistakes when accounting for rental costs

The biggest problems arise when the taxpayer enters the full amount of the rent in the tax return. The German tax office will not accept this. Only specific services qualifying for the relief are taken into account.

The second common mistake is missing documentation. If the apartment owner does not itemize the labor costs, the tax office may challenge the deduction.

Problems also arise when:

• the statement contains only a lump-sum amount,
• the costs are not described,
• the tenant does not have proof of payment,
• the service was paid in cash.

If amounts in the tax return differ from the documents issued by the property owner, the Finanzamt may ask for clarification. A good solution is to review the annual statement carefully before submitting the return. In practice, that is exactly when it is easiest to identify items that may increase the tax refund.

Can a tenant really get a larger tax refund?

Yes – and in many cases these are concrete amounts that are lost solely due to a lack of knowledge. German tax rules have allowed part of the costs related to apartment maintenance to be deducted for years, yet far fewer people still make use of this than could. The greatest benefits are usually available to tenants living in large apartment buildings where a cleaning company operates, regular technical inspections are carried out, the building has an elevator, a Hausmeister is employed, and the homeowners’ association uses gardening services. In such properties, the sum of deductible qualified costs can be very high.

That is why, before submitting the return, it is worth reviewing the rent statement, the Nebenkosten breakdown, and the costs of technical services in detail. Even seemingly small items from the annual statement can, when totaled, translate into a noticeably higher tax refund.

Careful analysis of the annual rent statement can realistically increase the tax refund and make it possible to recover costs that many tenants completely overlook. That is precisely why, before submitting the return, all housing-related charges should be checked, because correct tax filing in Germany often includes significantly more expenses than may appear at first glance.