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 topic Tax bonus for tradesmen's invoices: What you should know

Private customers can claim 20 percent of the labor costs up to a maximum of 6.000 euros each year for renovation and refurbishment work within your own four walls. If you reach the maximum amount, there is a Tax bonus of 1.200 eurosIf labor costs are only 2.100 euros, the tax bonus would still be 420 euros. 

Important: Only labor costs are deductible, not materials. And the invoice cannot be paid in cash. A married couple filing jointly can only claim the bonus once. 

Additional bonus: household services

For craftsmen’s services that are not renovation work but are carried out in the household (such as apartment cleaning or window cleaning), you can also claim the tax bonus for household-related services This amounts to an additional 1.200 euros per year (20 percent of 6.000 euros). 

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.

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Craftsmen’s services in a Second home, weekend home or holiday homewhich the taxpayer himself uses.

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 included in the tax return Page 3 of the main form entered under the item "Household-related employment, services, craftsmen's services" in line 75. 

Which tradesmen's work can you claim?

The Central Association of German Skilled Crafts has Tax bonus flyer a checklist has been compiled. Eligible craftsman services are therefore all craft activities for renovation, maintenance, and modernization measures that are performed for a client's 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

Attention: The work must be completed in the customer's home, not in the craftsman's workshop. For example, if a carpenter makes a window in his workshop, the labor costs are not eligible for tax relief. Only the installation costs at the customer's premises!

Tax bonus information at a glance A ZDH flyer informs about all important Details on the tax bonus. 

 Unfortunately, work carried out in the workshop of a craft business cannot be taken into account (see above). Craft activities within the framework of a New construction project are not applicable.

This is what the courts say What counts as a tax bonus and what doesn't? This is often up to the courts to decide. You can find current rulings in our Theme Special

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