Can tenants in Germany deduct building insurance from tax?
In short
Tenants in Germany usually cannot deduct the building insurance share in their service charge statement (Nebenkostenabrechnung) from tax. It is neither a special expense nor a household service. Exceptions are a home office that is the centre of all your work, and subletting. For 70 square metres the amount is around EUR 260 a year.
The home office is the centre of all her work and she claims actual costs.
Building insurance in the statement
around EUR 260
Floor share of the office
12 / 70 = just over 17 percent
Deductible insurance share
around EUR 45
Tax effect at 30 percent marginal rate
around EUR 13
The insurance share is a small part. The home office pays off through rent and all service charges together.
Why the share in your service charges usually does not count
Your landlord may pass on building insurance under section 2 no. 13 of the Operating Costs Ordinance (Betriebskostenverordnung) if your lease allows it. For you it is part of the cost of living in the flat, and for tax purposes that belongs to private life.
It is not a special expense either. Section 10(1) no. 3a of the Income Tax Act lists health and care, unemployment, disability, accident, liability and term life insurance. A policy that protects your landlord's building against fire or storm is not on that list.
Household services: other items yes, insurance no
Section 35a EStG reduces your tax by 20 percent of the labour costs for household services, up to EUR 4,000, and for tradespeople, up to EUR 1,200. Tenants can use it for services paid through the service charges.
Building insurance is a premium, not a service, so it does not qualify. It pays to look at caretaker, stairwell cleaning, gardening or maintenance in the same statement, which should be shown separately.
Item in the service charge statement
Tax treatment for tenants
Building insurance
not deductible, except home office or subletting
Caretaker, stairwell cleaning
section 35a EStG, 20 percent of labour costs
Heating maintenance, repairs
section 35a EStG as tradesperson work
Property tax
not deductible
Building liability insurance
not your own special expense, it protects the owner
Exception 1: a home office
If a separate room in your rented flat is the centre of all your professional and business activity, you can deduct the room's costs by floor area. That includes rent and service charges, and therefore the building insurance share. Example: 12 of 70 square metres is just over 17 percent.
Instead of actual costs you can deduct a flat EUR 1,260 a year under section 4(5) no. 6b EStG. Without a qualifying room, the daily allowance of EUR 6 per home working day applies, up to EUR 1,260. Both flat rates cover everything, the insurance share is not added on top.
Exception 2: you sublet a room
If you sublet part of your flat, you earn rental income under section 21 EStG. The proportionate costs of the flat, service charges included, become deductible expenses, so the building insurance share counts too.
A 15 square metre room in a 75 square metre flat is 20 percent. At EUR 0.31 per square metre a month that is around EUR 56 a year. Small, but it belongs in the rental income form (Anlage V) once you sublet anyway.
When it is not worth the effort
Without a home office and without subletting, tenants cannot deduct building insurance at all. You gain more by going through your statement for section 35a items and asking your landlord for the breakdown.
For your own protection, remember that your landlord's building insurance never pays for your furniture. That needs your own contents insurance.
Step by step
Find your landlord's service charge statement.
Mark items for household services and tradespeople.
Check whether a home office is the centre of your work.
If you sublet, work out the floor share.
Keep the documents and ask a tax adviser if unsure.
Checklist
Service charge statement with separate items
Section 35a certificate requested from the landlord
Floor plan showing the office area
Sublease and rental income documented
Common mistakes
Entering building insurance as a special expense
Claiming the insurance share on top of the home office allowance
Overlooking section 35a items in the statement
Questions and answers
Frequently asked
Can tenants in Germany deduct service charges?
Partly.
Labour costs for household services and tradespeople reduce tax by 20 percent under section 35a
EStG.
Building insurance is not one of them.
Does building insurance count as liability insurance?
No.
It protects the building against fire, water and storm.
Building owner's liability is a separate policy of the owner.
I work from home a lot. Can I deduct it then?
Only with a home office that is the centre of your work.
Otherwise the EUR 6 daily allowance applies, up to EUR 1,260 a year, and covers everything.
Is my landlord allowed to pass on building insurance?
Yes, if your lease provides for service charges.
It is listed in section 2 no.
13 of the Operating Costs Ordinance.
Is my own contents insurance deductible?
Usually not for a private flat.
With a recognised home office, a floor share may be deductible.
