Double Household Management – How You Can Save Money

Do you have a second residence at your place of work for professional reasons? Then you may be able to deduct part of the costs from taxes because you maintain a double household. In the following article, you will learn how you can do this. We invite you to continue reading!

Double household management – what are the requirements?

Four requirements must be met in order to deduct the costs of a double household management – only then can the tax office deduct your secondary residence for tax purposes. These requirements apply equally to employees and self-employed individuals.

1. You need a second residence for professional reasons.
2. As an employee, you use a secondary residence at your place of employment so that you can reach your workplace faster from there than from your primary residence.
3. Your primary residence is also the so-called center of life.
4. You maintain your own household outside of your place of work in your main apartment and pay more than 10% of your ongoing housing costs for it (at least evidenced by receipts from paid invoices).

If the tax office recognizes that you are maintaining a double household, you can receive a substantial tax refund, considering, among other things, the following expenses:

• • Costs associated with the second residence, which do not exceed 1,000 € per month (so-called accommodation costs),
  • Travel expenses,
  • Moving costs,
  • Costs for furniture and household goods,
  • additional food costs (during the first three months).

The application for a double residence is made by filling out the third page of Annex N in the tax return.

Double residence – Travel expenses

Travel expenses are considered additional deductible expenses for a double household. These include costs for:

• the first and last trip to the new residence (30 cents per kilometer),
• weekly trips to the family residence (mileage allowance: €0.30 per kilometer driven if the trip is made with one’s own car; from 2021, you can deduct up to €0.35 from the 21st kilometer); for weekly trips, it is a flat rate, so it is not necessary to present collected receipts to the tax office – however, it is good to have them on file just in case,
• Train or bus trips,
• Flights.

If you do not visit the family every week, it is possible to claim a deduction for long-distance calls (up to 15 minutes). Again, if you can commute from your main residence to your workplace within an hour, it is likely that your second residence will be rejected by the tax office due to the double household. The same applies to the mileage – your second residence should not be more than 50 kilometers away from your workplace to be considered as such (the shortest road connection is taken into account here).

Double household management – how the residence is determined

Your center of life must necessarily be permanently located at your primary residence (first residence). The tax office does not care which house you are registered in. If you move your center of life to your second residence, which is closer to your workplace, you must expect the tax office not to recognize your double household management. Here you will learn how the residence for married couples, singles, and individuals living abroad is determined.

• For married individuals, the family residence is usually the center of life (if the employee visits at least six times a year).
• For singles, the place of residence is the oneto which they have a stronger emotional bond. Those who visit their residence less than twice a month must be able to justify it through their relationship with family, friends, a partner, or club membership.
• If the household is abroad, you must travel there at least once a year and be able to prove to the tax office that your center of life is there.

Own household – Tax deductibility of accommodation costs in a second residence

If you maintain a double household for professional reasons, you can deduct various accommodation costs that do not exceed 1,000 € in your tax return. These include costs:

• for rent,
• for additional costs (heating, electricity, water, waste disposal),
• for cleaning (including basement and stairwell),
• for broadcasting fees,
• for tax on the second residence and the property,
• for special use (parking space, garden),
• for household and building insurance.

The principle of household-related services does not only apply to double household management. Even for private occasions like weddings, certain services can be claimed for tax purposes if they are provided in one’s own household. More on this, which wedding costs can be deducted under what conditions, can be found in our guide.

Accommodation costs are usually paid once a month or in other regular installments. In this case, it is possible to deduct the costs for a rented apartment, a furnished room, shared accommodation, or a room in a hotel or guesthouse (here breakfast can also be deducted). The tax office assumes that rent for a garage or parking space up to an amount of 1,000 € per month also counts towards accommodation costs.

Own household – Deductibility of the costs for furnishing a second residence

The German tax office offers you the possibility to deduct the necessary expenses for furnishing a second residence from taxes. These can be deducted without limitation as so-called other special expenses, decided by the Federal Finance Court (BFH, judgment of April 4, 2019, Az. VI R 18/17). The authorities recognize an income-dependent amount for the furnishing and equipping of a second residence, which does not exceed 5,000 euros. However, this limit is strongly contractually bound. So if you can prove that you spend higher amounts, you may be able to get a higher deduction for it. If the tax office rejects your application, you can lodge an appeal within one month.

Tax deduction for a second residence – Summary

The mobility and flexibility of employees in the workplace are highly valued, which is why many choose to maintain two households. This is accompanied by the possibility of deducting the expenses associated with two residences for tax purposes. To ensure that you do not make mistakes on your tax return, it is advisable to seek the assistance of a tax advisor or use a safe and easy-to-use tool, such as the tax app Taxando is.