(Photo: © Siam Pukkato/123RF.com)
Read aloud:
Craftsmen's costs, such as for repairs, can reduce your tax. However, if an insurance policy reimburses part or all of the costs, the tax office will reject the tax reduction.
Tenants or owners who hire a tradesman for renovation, maintenance, and modernization work can deduct part of the costs from their taxes. Private individuals can deduct up to €1.200 per household per year from their tax liability (20 percent of labor costs up to a maximum of 6.000 euros).
However, if the insurance company pays for damage that was repaired by a tradesman, this reduces the amount of the reduction, as the 13th Senate of the Münster Finance Court ruled in its judgment of April 6, 2016 (case no. 13 K 136/15 E).
Specifically, the case involved water damage, which resulted in repair costs totaling €3.224. The insurance company reimbursed the expenses. In her income tax return, the plaintiff included the repair costs and applied for a tax reduction. The tax office rejected this.due to the settlement of the claim by the insurance company.
Operations management
Operations management
Operations management
The Münster Finance Court also took this view. In order to claim the tax reduction for household-related tradesmen's services, it was necessary that the tradesmen's costs also constituted a so-called "economic burden." However, if the insurance company covers the tradesmen's costs, this is not the case.
The plaintiff also does not incur any financial burden from the insurance premiums paid, because they do not accumulate the insurance benefit. The claim for damages exists regardless of the total amount of premiums paid.
Newsletter
Write a comment