Deduct Relocation Costs In Your Tax Return [Umzugskosten]

Key takeaways

• The relocation expenses are tax deductible if you moved for personal or professional reasons.
• The “General moving costs” are fully tax-deductible, provided you submit proof to the tax office.
• The “Other moving costs” are also fully tax deductible if you have the proof. 
• You can also claim a relocation lump sum in your income tax return. You don’t need to submit proof to get the relocation allowance.
• The relocation allowance is 964 € plus 643 € per additional person from 1 March 2024.

This is how you do it

• Collect and keep all the move-related invoices.
• Add all the moving expenses for maximum tax savings.
• Use the relocation lump sum if your “Other moving costs” are lower than the flat rate.
• Use tax software to deduct all the possible moving costs. We find SteuerGo*, Wundertax*, and Smartsteuer* among the best tax software for expats in Germany.

Table of Contents

What are moving costs (Umzugkosten)?

When you change the pace where you live, you incur certain expenses to make the move. These expenses are called moving costs or Umzugkosten in German.

The reasons for making a move are broadly categorized into two categories.

• Job or work-related: You got a new job in a different city or country. Or you, as a self-employed, moved to a new city for work.
• Personal reasons: You have a newborn, and the apartment is not big enough. Or your health doesn’t allow you to climb five floors to reach your home.

There could be a lot of reasons to move to a new place. But they fall into one of the above categories for tax purposes.

We know moving is expensive. So, the German tax office allows you to deduct moving expenses from your tax return to reduce the burden.

However, the costs you can deduct and how you file your tax return depend on the reason for the move.

You can use online services to help you file and save income tax in Germany. We find Wundertax*, SteuerGo*, and Smartsteuer* among the best tax software out there.

If you have a complex tax return or filing it yourself makes you nervous, you should get advice from a tax consultant. Tax consultants are not cheap in Germany. Depending on your situation, they may cost between 500€ and thousands of euros.

However, a good tax consultant can save you a lot of money.

Work-related move 

What does the tax office consider a work-related move in Germany?

Here are some of the situations that the tax office considers a move due to professional reasons.

• You changed your job and must move to a new city.
• You start your very first job.
• You are moving due to a transfer by your employer.
• You move into or out of a company apartment because of your work.
• You moved to improve your working conditions. For example, moving closer to the workplace, moving to a new apartment so that both partners have a separate home office, etc.
• Moving from abroad for a new job in Germany.
• You moved to reduce the time it takes to reach the office. The German tax authorities accept the moving costs only if the time is reduced by at least 1 hour (round trip). It doesn’t matter if you move within the same city or municipality. You can use Google Maps to determine the average travel time from your home to the office. Spouses cannot add the travel time saved to reach the threshold. The tax office considers each partner’s travel time individually. 

What moving costs are tax deductible in Germany?

The tax office split the moving expenses into two categories:

• General moving costs (Allgemeine Umzugskosten)
• Other moving costs (Sonstige Umzugskosten)

“General” and “Other” moving costs are fully tax-deductible, provided you submit proof to the tax office. However, you can avoid collecting proof for “Other moving costs” by claiming the relocation flat rate. 

This means you can deduct “General moving costs” by submitting proof AND claim a relocation flat rate for “Other moving expenses” without requiring any proof.

NOTE: You can only deduct the expenses that you bear. Suppose your company reimburse the relocation costs. In this case, you cannot deduct the expenses covered by the company.

Learn other expenses you can deduct to save tax in our guide. You can also download the free cheatsheet summarizing all the expenses you can deduct from the taxes in Germany.

General moving costs

The following expenses come under “general moving costs.”

• 30 cents per kilometer for trips to apartment viewings
• Brokerage fees for rental properties
• Double rent payments for up to six months if you cannot or do not want to cancel your old apartment immediately
• Up to three months’ rent for the new apartment that cannot yet be used
• Moving company costs for transporting household goods
• Suppose you took private help to move your stuff instead of a moving company. You can still claim the “private help” expenses. However, you must submit proof (bank transfer and receipt (if possible)) to the tax office.
• Repair costs of the damages caused while transporting the household goods
• If renovation work is necessary, you can get back 20% of the labor and labor travel costs in a tax refund.
• Tutoring costs for your children to catch up on the school material. You can deduct up to 1286 € (from 1 March 2024) and 1181 € (from 1 April 2022).

NOTE: The day before you load the household goods determines the relocation lump sum. More on it later.

Other moving costs

You can fully deduct the costs related to the relocation from your tax return. Provided you submit the proof. 

However, you can also claim a lump sum for “Other moving costs.” The best part is that you don’t need to submit any proof to claim the relocation flat rate. 

Here are relocation expenses that come under “Other moving costs.”

• Renovation of the old apartment
• Cosmetic repairs in the old apartment
• Tips and meals for moving helpers
• Changing curtains
• The electrician’s cost for installing the lamps
• Installation costs of kitchen and other electrical appliances
• Costs of re-registration
• Cost of re-registering the car
• Change of internet connection

Usually, the flat rate of relocation is more than the actual expenses. But if you incurred more costs than the flat rate, you can deduct them all from the taxes. 

Of course, you must submit the proof, i.e., invoices and bank transfers, to the tax office.

What is the relocation allowance (flat-rate) in Germany?

The Federal Ministry of Finance (BMF) increased the “Other moving costs” flat rate on December 28, 2023. The relocation flat rate is 964 € plus 643 € per additional person from 1 March 2024.

The additional person can be

• your spouse or registered partner,
• unmarried children,
• foster or step-children who live in the same household as you

Relocation lump sum

Start of the move	One person	Surcharge for each additional person in the household
from April 1, 2022	886 €	590 €
from March 1, 2024	964 €	643 €

How much “relocation flat rate” can you claim in different cases?

Scenario	Relocation flat rate
One person	964 €
Married couples without children	1607 € (964 + 643 (spouse))
Married couples with one child	2250 € (964 + 643 + 643 (child))
Married couples with two children	2893 € (964 + 643 + 2*643 (2 children))
Married couples with three children	3536 € (964 + 643 + 3*643 (3 children))

Relocation lump sum increases for a second move

The moving lump sum allowance increases by 50% if you move the second time within 5 years. But you must meet the following requirements.

• The move is work-related.
• You rented or owned the home before and after the move. So, if you moved out or moved into your parent’s house, you cannot claim the increased allowance.
• You moved the second time within 5 years.

Example:

In 2020, you were living in a rented property (the contract was in your name) in Stuttgart. In 2021, you moved to Berlin as you got a new job. The new apartment’s rental contract was also in your name.

You moved to Hamburg in 2024 because of a new job. Again, the rental contract is in your name. In this case, you can claim 50% more in the relocation flat rate. 

How do you deduct relocation-related expenses from your taxes in Germany?

You enter the work-related moving costs as income-related expenses (Werbungskosten) in your income tax return. The Federal Moving Costs Act (Bundesumzugskostengesetz) is the legal basis for this.

You must submit proof of the moving expenses to the tax office (Finanzamt). The invoice and bank transfers are proof that the tax office accepts them.

If you don’t want to keep track of the invoices, you can deduct the relocation flat rate instead.

NOTE: Many moving companies prefer cash payments. But you must insist on a bank transfer. Some times the tax office doesn’t accept only the invoice.

If you use one of the tax software we recommend, it’ll guide you through entering all the possible moving costs. The tax software will also add the correct flat rate where it makes sense.

We find SteuerGo*, Wundertax*, and Smartsteuer* among the best tax software for expats in Germany.

Relocation costs you cannot deduct from taxes in Germany

You cannot deduct the following moving costs from your taxes.

• Brokerage fee for buying a new property at your new place. Suppose you moved to a new place due to your job. Instead of renting an apartment, you bought one. You cannot deduct the brokerage fee in this case.
• The furniture cost for your new home
• Cost of storing the furniture
• Renovation expenses of the new apartment
• Loss from selling the house due to the move
• You cannot deduct the expenses paid by the employer when filing an income tax return

The date of the move is important

The day before you load the household goods is decisive for the flat rate. The tax office uses this date to determine which lump sum (allowance) you are eligible for. 

Relocation flat-rate

Start of the move	One person	Surcharge for each additional person in the household
from April 1, 2022	886 €	590 €
from March 1, 2024	964 €	643 €

For example, if you move on 29 Feb 2024, you’ll get the flat rate of 886 € plus 590 € for each additional person. However, if you move on 1 March 2024, you’ll get the new increased flat rate.

So, shifting the move by one day can save you 78 € (964 – 886) plus 53 € (643 – 590) per additional person in the tax year 2024.

Tutoring cost reimbursement limit

Start of the move	Tuition expenses
from April 1, 2022	€1,181
from March 1, 2024	€1,286

The same applies to the tuition costs. Your date of move determines the maximum tax-deductible amount.

Personal move

What moving costs can you deduct if you relocate due to a personal reason?

You can also claim moving expenses if the relocation was due to personal reasons. However, the tax office sets a maximum limit on the sum you can deduct.

The maximum amount you can deduct is 20,000 € per year. The tax office will refund 20% of the claimed amount.

So, if you move for personal reasons, you can get a maximum tax refund of 4000 € (20% of 20k). 

You enter the moving expenses in the household-related costs (Haushaltsnahen Dienstleistungen) appendix. 

How do you claim moving costs if you are moving out of necessity?

You can also claim the moving costs if the move is necessary for health reasons. For example, you cannot climb five floors to reach your home anymore due to health problems.

In this case, you add the moving expenses in the Appendix “Extraordinary Burden.” The tax office also requires a medical certificate to prove your health condition.

FAQ

I moved from abroad to Germany. Can I deduct the moving costs from my taxes in Germany?

If you moved to Germany for a new job, you can deduct moving expenses from your tax return. You enter moving costs as income-related expenses while filing a tax return.