Primer on how to Deduct Costs for a Home Office

If you have more than a living room and bedroom (plus bathroom, kitchen) in your apartment then you can think of deducting costs for a home office. Starting 2005, the rules for having the Finanzamt participate on your costs have become more strict.

What constitutes as costs for a home office? Anything that can be related to using the room, items like cleaning, quota of rental payment or purchase costs, electricity, water, etc. This deduction is generally possible for any kind of income.

Following situations are to be differentiated:

  • Home office is used totally for professional or operational use (the legislator dubs this as “center of all operational and professional activities”). This situation enables you to deduct 100% of office costs from your income.
  • Home office is not “center of all your professional or operational activities" but it is used for more than 50% of all professional or operational activities,
  • There is no other worksite for professional or operational activity (office type of work, but also intellec­tual, artistic, or professional writing [like for journalists or book authors]).

 

In all cases, except the first, the deduction is limited to € 1,250. Since 2005, this deduction is object related. This means that if you share your office room with somebody else, you can only deduct € 1,250 – per home office. Supposing you have a very large room you use together with another person, you might want to raise a separating wall so that you have two separate rooms.

The costs for office space you professionally own are not touched by these rules. These costs – as typical business costs – are always completely deductible.