Rising housing costs make alternative living arrangements attractive, and the tiny house has become a permanent fixture – as an affordable home, a mobile office or an investment property. The tax treatment, however, is anything but simple. Almost everything turns on one question: is the tiny house a movable asset or a building?
What counts as a tiny house?
Usually the "tiny house on wheels": a compact living unit of typically 15 to 20 m², built on a road-legal trailer and therefore not permanently attached to the ground. These homes are normally fitted out like full houses – kitchen, bathroom, sleeping and living areas, plus connections for electricity, water and waste water. Stationary micro or mini houses are a different category.
Movable asset or building?
Under settled case law, a building is a structure that provides shelter through spatial enclosure, allows more than a temporary stay of people and is firmly attached to the ground (BFH, judgment of 25 April 1996, III R 47/93).
A classic tiny house on wheels is a movable asset. If it rests on a road-legal trailer and can be moved at any time without loss of substance, that firm attachment is missing. For tax purposes it is then treated like a caravan or a container, as long as its placement is intended to be temporary only (BFH, judgment of 22 July 2020, II R 37/17). A typical indicator: moving it to winter storage at the end of the season.
Permanent, fixed-location use makes it a building. The tax authorities assume a building in particular where
- the house rests on a foundation under its own weight,
- the wheels have been removed, or
- utility connections are installed so substantially that a quick relocation is ruled out.
Building status can exist even without a foundation if the fixed location is externally recognisable and intended to be permanent (BFH, judgment of 23 September 1988, III R 67/85).
In short: parked only temporarily, the tiny house remains a movable asset. Once construction work creates permanent stability, the rules for buildings apply.
Depreciation: eight years, or 2 to 3 per cent?
- Movable asset: depreciation follows sec. 7 (1) EStG. Because the official depreciation tables do not list "tiny house", it is classified by general understanding – the relevant entry is "caravans, trailers and sales vehicles" with a useful life of eight years (straight-line, 12.5 per cent a year).
- Building: sec. 7 (4) EStG applies – 3 per cent for non-residential use; for residential use 3 per cent if completed after 31 December 2022, otherwise 2 per cent. A shorter useful life can be evidenced under sec. 7 (4) sentence 2 EStG.
In business assets, movable-asset status is often more favourable: the investment deduction and special depreciation under sec. 7g EStG and declining-balance depreciation are then available – neither applies to buildings. Conversely, residential buildings may qualify for special depreciation under sec. 7b EStG.
Practical tip: document that mobility is preserved – road registration, no foundations, temporary placement only. That is the only way to justify the more favourable depreciation rules to the tax office.
Tiny house as an investment: sec. 21 or sec. 22 EStG?
For private letting, the classification decides again:
- Movable asset: income from other services under sec. 22 no. 3 EStG. Advantage: income below EUR 256 a year is tax free. Disadvantage: losses can only be offset against positive income of the same type.
- Building: income from letting and leasing under sec. 21 EStG – taxable from the first euro, but losses can be offset against other types of income without restriction.
Careful with short-term letting to changing guests: once hotel-style extras such as cleaning, breakfast or a permanent reception are added, the activity can cross into a commercial business (sec. 15 EStG). Such cases fall outside the advisory scope of a Lohnsteuerhilfeverein.
Own use: sec. 35a and sec. 35c EStG
Purchase and running costs of a self-occupied tiny house are private living expenses and not deductible (sec. 12 no. 1 EStG). Two tax reliefs remain:
- Sec. 35a EStG: a tiny house serving as your residence or habitual abode is a "household". Tradesperson services – repairs to the trailer, servicing the infrared heating, connecting to utility lines – qualify at 20 per cent of gross labour costs (max. EUR 1,200 a year), household-related services at 20 per cent (max. EUR 4,000). The work must be performed in the household and paid by bank transfer. Repairs in an external workshop are not eligible, and if the tiny house is only used for holiday trips alongside a stationary main residence, the centre-of-life requirement fails.
- Sec. 35c EStG: relief for energy-efficiency measures (20 per cent over three years, max. EUR 40,000) requires an owned building that is more than ten years old when the work is carried out. Mobile units on wheels are excluded.
Selling: taxable or not?
For privately held tiny houses:
- Movable asset (comparable to a motorhome) → not taxable (BFH, judgment of 27 January 2026, IX R 4/25).
- Building sold within one year → taxable under sec. 23 (1) sentence 1 no. 2 EStG.
- Building sold after more than one year → not taxable; exception: if it was used as a source of income (letting) in the meantime, the period extends to ten years.
- Building sold after more than ten years → not taxable.
If a tiny house is sold on its own without land, taxation as a property transaction under sec. 23 (1) sentence 1 no. 1 EStG does not apply (BFH, judgment of 24 May 2022, IX R 22/21).
Real estate transfer tax: if the tiny house remains mobile by purpose, no transfer tax arises. If it qualifies as a building on third-party land, the purchase price is subject to transfer tax under sec. 2 (2) no. 2 GrEStG – as already held for a mobile home without a foundation (FG Münster, 18 June 2020, 8 K 786/19) and for a firmly anchored mobile home (FG Schleswig-Holstein, 12 August 2019, 3 K 55/18).
Frequently asked questions
My tiny house sits permanently on rented land. What applies? The overall picture decides: wheels removed, foundation, substantial connections – then it is a building. If it stays road-ready and is only placed temporarily, it remains a movable asset.
Can lexo.tax advise me on rental income from a tiny house? For private letting (sec. 21 or sec. 22 no. 3 EStG) yes, within membership. From 1 September 2026 even without the former income caps – see our page on membership. Commercial short-term letting with hotel-style services requires a tax adviser instead.
Can I deduct my tiny house as a home office? For purely business use, the restriction for a home study (sec. 4 (5) no. 6b EStG) does not apply, provided the unit is not integrated into your domestic sphere. Employees follow the rules on study rooms and the home-office allowance.
Legal basis and sources
- Secs. 7, 7b, 7g, 12, 21, 22, 23, 35a, 35c EStG; sec. 2 (2) no. 2 GrEStG; sec. 95 BGB
- BFH judgments of 25 April 1996 (III R 47/93), 23 September 1988 (III R 67/85), 22 July 2020 (II R 37/17), 24 May 2022 (IX R 22/21), 27 January 2026 (IX R 4/25)
- FG Münster, judgment of 18 June 2020 (8 K 786/19); FG Schleswig-Holstein, judgment of 12 August 2019 (3 K 55/18)
- BMF depreciation table for generally usable assets, 15 December 2000, sec. 4.2.9
- BVL – Bundesverband Lohnsteuerhilfevereine e.V., technical bulletin no. 6/2026
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 scope of membership at lexo.tax – and exclusively to the extent permitted by law under sec. 4 no. 11 StBerG (from 1 September 2026: sec. 4 StBerG as amended).