Household-related services

Household-related services are tasks that are typically performed by the residents of a household themselves but are outsourced to third parties for a fee-and which, under Section 35a of the Income Tax Act (EStG), can be deducted directly from income tax at a rate of 20% of the labor costs (up to a maximum of €4,000 per year). Typical examples include cleaning services, gardening, snow removal, in-home childcare, and care for relatives. These should be distinguished from tradespeople’s services, which are eligible for tax relief under the same provision but with a separate maximum amount of €1,200 per year.

What counts as household-related services?

Services recognized as household-related include, among others:

• Cleaning of the home and windows by a domestic helper or a service company
• Yard maintenance (mowing the lawn, trimming hedges, raking leaves)
• Winter maintenance (snow removal and salting in front of the house)
• Childcare at home (unless otherwise deductible as childcare costs)
• Care and support for relatives in the taxpayer’s own household
• Janitorial services in owner-occupied properties

Services provided outside the household (e.g., cleaning at a laundry) or those of a purely manual nature are not eligible (these fall under the separate tax credit for tradespeople’s services).

Requirements for Tax Deductibility

To qualify for the tax deduction, the following conditions must be met:

• The service is provided in the taxpayer’s household
• The service provider is an employee subject to social security contributions, a part-time worker (if applicable, through the Minijob-Zentrale), or a commercial enterprise
• Payment is made by bank transfer (no cash payments!)
• An invoice is provided that lists labor and material costs separately

The deduction amounts to 20% of labor costs (excluding material costs), up to a maximum of €4,000 per year as a direct tax reduction (not merely as a deduction for expenses).

Household-Related Services in Condominium Associations and Rental Agreements

Tenants and homeowners in a condominium association can also benefit from the tax reduction-specifically for services that are allocated to them via the utility bill or maintenance fee statement (e.g., janitor, stairwell cleaning, garden maintenance). The prerequisite is that the landlord or condominium association manager issues a corresponding certificate showing the portion of labor costs attributable to the owner/tenant.

Practical Tip for Owners in Nuremberg and Franconia

We recommend that owners in Nuremberg and the surrounding region always pay for household-related services via bank transfer and keep the invoices, including a breakdown of labor and material costs, organized and on file. Anyone who employs a domestic helper should check whether registering them as a “minijob” through the Minijob-Zentrale makes sense-this allows for a straightforward tax deduction. Property managers in the region are required, upon request, to issue an annual certificate for the tax office.

Frequently Asked Questions

Can I claim deductions for both household-related services and tradespeople’s services?

Yes, both categories can be claimed simultaneously-they have separate maximum amounts. For household-related services, the maximum tax reduction is €4,000 (20% of €20,000 in labor costs); for tradespeople’s services, the maximum is €1,200 (20% of €6,000 in labor costs) per year.

Is childcare provided by a childminder considered a household-related service?

Childcare may fall under Section 35a of the Income Tax Act (EStG) if the care takes place in the taxpayer’s household. If it takes place outside the household (e.g., at the childminder’s home), the provisions for childcare costs under Section 10(1)(5) of the Income Tax Act (EStG) apply instead, which may be more advantageous.

Do costs for snow removal services count as well?

Yes, winter services (snow removal and salting in front of the house) on one’s own property and the adjacent sidewalk are considered household-related services and are tax-deductible-provided payment is made by bank transfer and a proper invoice is available.

Household-related services and the annual tax return

The tax reduction under Section 35a of the Income Tax Act (EStG) is not granted automatically but must be claimed annually in the income tax return. The relevant information must be included in the Household-related Expenses Schedule (Schedule HHA). Anyone who misses the deadline for filing the tax return may permanently lose the deduction for the year in question-since retroactive claims are generally no longer possible once the tax assessment has become final.

Important: The tax authorities do not require receipts when filing the return, but recommend keeping invoices and bank statements for at least five years, as a subsequent audit by the tax office is possible. Cash payments are not recognized under any circumstances-even if all other requirements are met.

Special Cases: Household-Related Services in Senior and Nursing Care Facilities

A little-known rule applies to residents of senior residences, assisted living facilities, or nursing homes: They, too, can claim tax deductions for household-related services and tradespeople’s services, provided they live in a separate apartment that is considered a separate household. The facility operator or institution typically issues an annual certificate for this purpose, which breaks down the labor cost components of the various services. Many residents do not take advantage of this benefit because they are unaware of the option.

For property owners in Nuremberg who help their parents with their tax returns or act as caregivers, we recommend requesting these certificates annually from the facility operator and including them in the tax return. The potential tax benefit can amount to several hundred euros per year, depending on facility rates and personal tax rates.

Combination with Care Allowance and Care Benefits

Household-related services provided by outpatient care services may be tax-deductible under Section 35a of the German Income Tax Act (EStG)-but only to the extent that they are not already covered by care allowance or in-kind care benefits from the long-term care insurance fund. Double funding is not permitted. Anyone who employs a private care service that provides both nursing and domestic services should insist that the invoice lists both service areas separately. This is the only way to ensure that the domestic portion can be claimed without a doubt as a household-related service with the tax office.

We recommend that property owners and landlords in Nuremberg systematically address the issue of household-related services: maintaining an ongoing record of receipts, obtaining an annual certification from the condominium manager, and carefully documenting all relevant service providers are the foundation for fully utilizing the tax benefit. Discuss this with your tax advisor or income tax assistance association in Nuremberg-in many cases, potential savings are still being missed.

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