Include tradesman’s invoice in your tax return!

Tenants and homeowners can deduct labor costs for almost all renovation work from their taxes—up to €1.200 per household per year. This is how the tax bonus for tradesmen's services works.

This article is part of the special feature " Tax bonus for craftsmen's invoices: What you should know".

Private customers can claim 20 percent of the labor costs, up to a maximum of €6.000, annually for renovation and refurbishment work within their own homes. If they reach the maximum amount, they receive a tax bonus of €1.200 . If the labor costs are only €2.100, the tax bonus would still be €420.

Important: Only labor costs are tax-deductible, not materials. Payment must not be made in cash. A married couple filing jointly can only claim the bonus once.

Additional bonus: household services

For services performed by tradespeople that are not renovations but are carried out in the home (such as apartment cleaning or window cleaning), you can also claim the tax credit for household-related services . This amounts to an additional €1.200 per year (20 percent of €6.000).

Checklist: What does the tax office want to see as proof?

• The taxpayer must submit the craftsman’s invoice to the tax office.
• Material costs are not taken into account.
• Labor costs and travel expenses (including VAT) are eligible for tax relief.
• The labor costs must be separately stated on the tradesman's invoice (make sure this is done, otherwise you will lose the bonus!).
• For maintenance contracts, an attachment to the invoice showing the labor costs is sufficient.
• However, cash payments are not eligible for tax relief. The tax office will require a bank transfer receipt or bank statement, for example, so you can pay by debit card, crossed check, or bank transfer.

The tax bonus will not be granted if the customer has already claimed the tradesman's invoice as a business expense, advertising expense, special expense or extraordinary expense.

You might also be interested in:

Operations management

Leasing return: What damages do you have to pay for?

Operations management

Tax bonus for skilled trades services remains in place

Operations management

Economics Minister Ebling: "What matters is what arrives at the workshop."

Services performed by tradespeople in a second home, weekend home or holiday apartment used by the taxpayer are also eligible for tax relief.

Example calculation of tax bonus:

In the calendar year 2019, a taxpayer paid and documented labor costs for energy-efficient building renovation measures amounting to EUR 4.600, maintenance costs for the heating system amounting to EUR 400, and repair costs (labor share) for the washing machine amounting to EUR 200 (all amounts including VAT).

Calculation:
Renovation costs: 4.600 euros
Maintenance costs: 400 euros
Repair costs: 200 euros
Total amount: 5.200 euros
of which 20% = 1.040 euros

Source: ZDH

Where is the craftsman's work taken into account in the tax return?

Craftsmen's services are entered in the tax return on page 3 of the main form under the heading "Household-related employment, services, craftsmen's services" in line 75.

Which tradesmen's work can you claim?

The German Confederation of Skilled Crafts has compiled a checklist in a flyer about the tax bonus . According to this checklist, eligible skilled trades services include all skilled trades work for renovation, maintenance, and modernization projects carried out for a household located in Germany, the European Union, or the European Economic Area.

• Work on interior and exterior walls, roofs, facades, garages, etc.
• Repair or replacement of windows and doors, floor coverings (e.g. carpet, parquet, tiles)
• Painting/varnishing doors, windows (inside and out), closets, radiators and pipes
• Repair, maintenance or replacement of heating systems, electrical, gas and water installations
• Modernization or replacement of the fitted kitchen
• Modernization of the bathroom
• Repair and maintenance of household items
• (e.g. washing machine, dishwasher, stove, TV, PC)
• Garden design measures (not eligible for initial installation as part of a new construction project)
• Paving work on the residential property
• Services of chimney sweeps

Important: The work must be carried out at the customer's home, not at the tradesperson's workshop. For example, if a carpenter makes a window in their workshop, the labor costs are not eligible for the tax break. Only the installation costs at the customer's home are eligible!

Tax bonus information at a glance: A flyer from the ZDH provides information on all important details about the tax bonus.

Unfortunately, work performed in a workshop of a craft business cannot be considered (see above). Craft work carried out as part of a new construction project is also not eligible.

What the courts say: What counts as a tax bonus and what doesn't? This often has to be decided by the courts. You can find current rulings in our special feature .

DHB is now also available digitally! Simply click here and register for the digital DHB!