Pets, tradespeople and domestic help: Clever ways to save tax
Tax relief through household-related services and tradesman services
Whether it is a tradesperson, domestic help, or pet care – many services performed within your own household offer tax advantages. Through targeted planning and compliance with legal requirements, you can significantly reduce your tax burden. Of particular interest are the maximum limits for household-related services (§ 35a Abs. 2 EStG (Income Tax Act)) and tradesman services (§ 35a Abs. 3 EStG), which enable tax relief.
"Whether on four paws or in work gloves – clever planning saves taxes!" 🐾✨
Tradesman services: Making optimal use of the tax bonus (§ 35a Abs. 3 EStG)
Anyone who has renovation or repair work carried out in their own household can claim 20% of the labour costs (excluding material costs) against tax. The maximum tax bonus is €1,200 per year, which corresponds to an expenditure of €6,000 annually.
Requirements:
- Labour costs: Only labour, machinery, and travel costs can be deducted; material costs are not eligible.
- Private household: The work must take place in a self-occupied private household.
- Non-cash payment: Cash payments are not recognised – payment must be made non-cash, e.g., via bank transfer.
- Invoice: A detailed invoice is required, showing labour costs separately.
Planning opportunity: Split of costs
If the costs for tradesman services exceed €6,000, you can split the payments over two tax years to take full advantage of the tax bonus.
Example: Renovation costs of €10,000:
- Payment of €6,000 in 2024: Tax bonus €1,200.
- Remaining payment of €4,000 in 2025: Tax bonus €800. Total tax bonus: €2,000.
Energy-efficient refurbishments (§ 35c EStG)
For energy-efficient refurbishment measures, e.g., insulation or the replacement of heating systems, a tax credit of 20% of the refurbishment costs up to a maximum of €200,000 can be applied. This results in a tax bonus of up to €40,000, distributed over three years.
Important: To use the full bonus, refurbishments should be completed well before retirement, as the tax credit is only possible if income is sufficiently high.
Household-related services: Tax bonus for everyday help (§ 35a Abs. 2 EStG)
Household-related services are activities closely related to the management of the household. Examples include:
- Cleaning the apartment: Regular cleaning by a domestic helper.
- Garden maintenance: Mowing the lawn, hedge trimming, or leaf removal.
- Childcare: Care provided by a nanny or childminder in the household.
- Snow removal service: Clearing and gritting in winter.
- Pet care: Boarding and care of pets, e.g., dog walking or feeding.
In this case too, the tax bonus is 20% of the expenses up to a maximum of €20,000. This corresponds to a maximum amount of €4,000 annually.
Practical examples:
- Gardening: If you hire a service provider to maintain your garden, the costs can be claimed for tax purposes.
- Domestic help: Costs for a domestic helper subject to social security contributions, e.g., a cleaner, are also eligible.
- Pet care: According to a ruling by the Bundesfinanzhof (BFH) (Ref. VI R 13/15), even dog walking by a service provider is tax-deductible if the service is provided within the framework of the household.
Combined tax relief: Maximising the benefits
The tax credits for household-related services and tradesman services can be claimed independently of each other. This allows for a double tax relief, provided the maximum amounts are not exceeded.
Summary of tax bonuses:
| Service | Max. Tax Credit | Max. Expenditure |
|---|---|---|
| Minijobs in the household | €510 | €2,550 |
| Household-related services | €4,000 | €20,000 |
| Tradesman services | €1,200 | €6,000 |
| Energy-efficient refurbishment | €40,000 | €200,000 |
Special considerations for pet care: Tax deductibility
The care and maintenance of pets also count as household-related services. Examples are:
- Feeding and care of the animal in the household.
- Dog walking: Taking dogs for a walk can be tax-privileged if it is performed by a service provider.
Not deductible: Veterinary costs or accommodation in a boarding kennel/cattery, as these services are not provided within the household.
Note
This article is for general information purposes and was carefully prepared by the editorial team at Lexo.Tax. Personal tax advice can only be provided within the framework of a membership with Lexo.Tax – and exclusively to the extent legally permitted under § 4 Nr. 11 StBerG (Tax Consultancy Act).