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Home offices – What costs have to be deducted in the case of life partners?

When life partners live together in a flat or a house the question that arises is whether or not and what amount of the costs for a home office are tax deductible.

The use-oriented costs for the space (e.g. for energy, water, cleaning, renovation) can be taken fully into account for tax purposes by the person who uses the home office. In the case of property-oriented expenses (e.g. rent, depreciation, debt interest, real estate tax, home insurance) what matters is the ownership or the tenancy situations. The Schleswig-Holstein Ministry of Finance, in a decree from 8.1.2020 (reference: VI 308 - S 2145), made the following distinction:

(1) Home office user as sole owner - If the property that is occupied is wholly owned by the user of the home office then the property-oriented expenses may be fully deducted by him/her if they are paid out of his/her bank account or out of an account jointly held with his/her partner. The costs would not be deductible only if they were being paid out of the bank account of the other partner.

(2) Home office user as joint owner - If the property is jointly owned by the partners then the user may only deduct the full amount of the expenses if s/he pays them out of his/her account. If the money comes out of the joint account of the partners then the costs may only be deducted to a limited extent, up to the proportion of the co-ownership share. When payments are made out of the account of the “non-user” then no deductions are allowed.

(3) “Non-user” as sole owner - If the property is wholly owned by that partner who does not use the home office him/herself then the user may only deduct the costs for this space if s/he pays them out of his/her own account (not a joint account).

The above-mentioned principles apply accordingly in the case of rented rooms. In that case, instead of ownership, what matters is which partner appears as the tenant. In cases where both spouses are tenants and pay the costs out of a joint account then 100% of the costs may be deducted. The cost deduction will be limited to 50% of the costs only if the home office in these cases takes up more than 50% of the overall living area.

Please note: The above-mentioned apportionment principles also apply for registered partners and unmarried cohabiting couples.

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