Key takeaways

• Even if you don’t have a dedicated separate room for a home office, you can still claim a home office flat rate from the 2023 tax year.
• The home office’s annual lump sum is 1260 €. 
• The home office allowance applies to each individual. So, in the case of married couples or registered partners, each partner can claim the lump sum. 
• You can also deduct unlimited home office costs from taxes. Provided your home office is the center of your professional activity and your home office meets the strict requirements for the tax office. 

This is how you do it

• Save the invoices of the home office expenses to deduct costs from taxes.
• Use tax software to help you deduct or claim expenses from your tax return. We find SteuerGo*, Wundertax*, and Smartsteuer* among the best tax software for expats in Germany.
• Calculate what’s more advantageous for tax purposes: deducting the home office flat rate or the commuting flat rate.

Table of Contents

Who can deduct home office costs from income tax in Germany?

You can deduct unlimited home office costs from the taxes if you meet the following criteria.

1. Your home office is the center of your professional activity
2. Your home office space meets the strict requirements set by the tax office.

You can deduct the home office allowance if you don’t meet the above criteria but meet one of the criteria below. 

1. There is no official workplace allotted to you by your employer.
2. You and your employer agreed on the work-from-home arrangement.
3. You work from home but don’t have a dedicated home office space.

The home office allowance is 6 € per day for the days you work from home. So, you should record how many days you worked from home. 

The maximum home office lump sum you can claim is 1260 € for the 2023 tax year. 

You don’t need any proof to deduct the home office flat rate. However, you need proof of the costs to deduct more than the flat rate.

Employed people can deduct home office expenses as income-related expenses (Werbungskosten) and self-employed individuals as business expenses (Betriebsausgaben) from their tax returns.

When does the tax office consider the home office the center of your professional activity?

The decisive factor in determining whether the home office is the center of your professional activity is the content-related, qualitative focus of all your activities. The amount of time is only an indication.

Therefore, the home office can also be the center of activity when working in the field.

Suppose you can work equally well in your home office and workplace outside the home. In this case, the tax office considers your home office the center of your business activities. Provided you work more than half of the time at home.

Requirements for a tax-deductible home office space in Germany

To be able to deduct full home office costs from taxes, your home office space must meet certain requirements.

• The room must be part of your domestic living space in terms of location, function, and furnishings.
• A room in the basement or attic can also be a home office if it is connected to your private living space.
• The tax office doesn’t consider storage rooms as a home office.
• The home office must be a closed room. This means a work corner is not enough.
• There must be enough living space left after considering the home office. For example, it’s tough to prove that you use a dedicated closed room as a home office in a one-room apartment.
• You must use the home office room exclusively for professional or business purposes. To be exact, you can use the space privately for 10% of the time. If you use it more than 10% of the time privately, you can’t deduct the home office costs. 

How much is the home office lump sum for the 2023 tax year in Germany?

The home allowance from 2023 is 6 € per day instead of 5 €. You can claim it for up to 210 days in a year instead of only 120 days.

This means from 2023, taxpayers can claim up to 1,260 € per year (210 days * 6 €) as a home office allowance.

Moreover, you can claim the home office flat rate even if you don’t have a dedicated office space at home. This was not possible before 2023. 

The German tax authorities also made the home office flat rate “permanent” from 2023. “Permanent” means that the home office flat rate is not a temporary tax regulation but will remain so. 

So, if you don’t have enough proof of the expenses or a dedicated office space at home, you can use the flat rate to save taxes. 

NOTE: You can claim the home office flat rate for the full months in which home office was the center of your activity. If you worked only ten months from home, you can deduct only 1050 € from taxes.

What home office expenses can you deduct from your tax return in Germany?

Suppose your home office is recognized as the center of your professional activities, and the home office space meets the tax office’s requirements. In this case, you can deduct unlimited home office costs from the taxes.

Here are the home office costs you can deduct from your income tax return. 

Proportionally tax deductible home office costs

You can deduct the costs like rent, electricity, heating, etc., from your taxes. However, you can deduct only the portion of the living space used as a home office.

Example:

• Your home office space: 15 m2
• Total living area: 80 m2.
• The tax office will calculate the ratio of the home office area and the total living area: 15/80 = 0.1875 
• Rent: 1000 € per month (including heating)
• Tax deductible home office cost: 1000 * 0.1875 = 187.5 € per month or 2250 € per annum.

So, in this example, you can deduct 2250 € from your income tax return as home office costs.

Here are all the property costs that you can deduct from your taxes.

• Rent,
• If you are the owner of the house, you can deduct
  • House depreciation
  • Interest on mortgages
  • Construction or renovation costs
  • House and property owners’ association
• Water, sewage, costs
• Heating costs
• Costs for electricity,
• Cleaning costs,
• Property tax,
• Garbage collection fees,
• Chimney cleaning fees,
• Contributions to the tenants’ association,
• Building and household contents insurance,
• Legal protection insurance for property owners,
• Renovation costs of areas that belong to the apartment building (for example, central heating, windows, roof, stairs, etc.).

Fully tax deductible home office expenses

• Renovation cost of the home office
• Cost of furnishing the home office, e.g., cost of office chairs, desks, shelves, etc.

You can deduct the furniture that costs less than 800 € net or 952 € after VAT. The tax office considers such furniture a low-value asset (Geringwertige Wirtschaftsgüter (GWG)).

However, if the value of your furniture exceeds 800 € net, you must depreciate it over 13 years. As per the Wachstumschancengesetzes (Growth Opportunities Act), this limit will rise to 1,000 € net from 2024.

NOTE: You cannot deduct luxury items from your tax returns. For example, the cost of an expensive showpiece.

You can also use tax software to help you file your tax return. The tax software we recommended is in English. The application even guides you in claiming expenses on your tax return.

What expenses can you deduct even without a home office?

Suppose the tax office didn’t recognize your home office. You can still deduct your work-related equipment from taxes. 

Employed individuals can deduct equipment costs used for work as income-related expenses. Similarly, self-employed people can claim their work-related equipment costs as business expenses (Betriebskosten). 

The costs of work equipment are fully tax deductible if you use them 90% of the time for professional purposes. Otherwise, you can partially deduct the costs based on how long you used the equipment for business activities.

Here are the things you can deduct as work equipment costs in Germany.

• Computer
• Smartphone
• Work clothes
• Books
• Tools
• Software
• Furniture
• Office supplies, etc.

Read our guide on expenses you can deduct from taxes in Germany to learn more. You can also download the free cheatsheet summarizing all the expenses you can deduct from the taxes in Germany.

Home office lump sum vs commuting lump sum

If you travel to the office, you can deduct the travel costs from your taxes. The German tax office offers a travel allowance of 0.30 € per kilometer (as of 2024) for one-way travel to work.

The travel allowance increases to 0.38 € per kilometer (as of 2024) for a one-way distance to work longer than 20 kilometers.

The travel allowance will be 6 € per day if the distance to your place of work is at least 20 kilometers. And the home office flat rate is also 6 € per day.

Consider the fuel costs, mileage, and car wear and tear to check which is more beneficial: claiming a travel or a home office allowance.

Deducting the home office flat rate is beneficial if the distance between your home and office is less than 20 kilometers.

References

• https://taxfix.de/ratgeber/news/corona-homeoffice-pendlerpauschale/
• https://www.steuertipps.de/lp/steuern-homeoffice
• https://www.finanztip.de/haeusliches-arbeitszimmer/