Tax-deductible house allowance: guide for homeowners in 2025

As part of a WEG and owner of a condominium, you pay monthly house fees to cover the common costs of your residential complex. The potential for tax savings is often overlooked, as certain components of the house allowance are tax-deductible. This opens up the opportunity to reduce your financial burden and take advantage of tax benefits. However, caution is advised: Not every item in the house allowance is automatically deductible.

What is behind your house allowance?

Every month, you transfer an amount to your property management company known as the house allowance. This money is used to finance all costs incurred for the maintenance and management of your communal property. This includes, for example, repairs to the façade or stairwell, payment of the property management, insurance for the building and the creation of reserves for larger renovation measures.

These costs are not part of the house rent

However, costs that the individual homeowners have to bear themselves are not included in the house allowance. These include, for example, property tax, telephone, internet and television costs, household contents insurance and all costs incurred for the maintenance, renovation or modernization of their own home. Landowner's liability insurance is also not usually included in the house rent.

Overview: What is part of the house allowance - and what is not

Examples of costs that may be included in the house rent:

• Cleaning the common areas
• Garden maintenance
• Waste disposal
• Janitor services
• Building insurance
• Maintenance reserve
• Community electricity and heating
• Elevator maintenance
• Maintenance of cellars, swimming pools and other common areas

Examples of costs that are not included in the house rent:

• Property tax
• Costs for telephone, Internet and television
• Household contents insurance
• Landowner's liability insurance
• Maintenance, renovation and modernization of your own home

You can find a detailed explanation in our guide on the topic of house rent.

Determining the house fee: an annual process

Determining the amount of the house fee is an essential task of the property management of your condominium owners' association. This process takes place once a year at the owners' meeting and proceeds as follows:

Preparation and proposal

• The property management prepares an economic plan
• This business plan serves as the basis for assessing the amount of the house rent

Decision making

• The owners' meeting convenes
• The business plan is presented and discussed
• A vote is held on the proposed amount of the house fee
• A simple majority of the apartment owners is sufficient for acceptance

Consequences and obligations

• All owners must pay the agreed house fee
• This obligation exists regardless of the use of the property - i.e. whether you rent it out or move into it yourself

Possible adjustments

• If the house rent is set too low: Additional payments may be necessary
• If the house rent is too high: refunds are possible

This process ensures a fair and transparent determination of the house fee, taking into account the financial needs of your condominium.

How the house rent is distributed among the owners

As a member of your homeowners' association , you are no doubt now interested in how much your share of the house fee is. The calculation is usually based on the size of your co-ownership share. This means that the larger your share of the common property, the higher your monthly payment will be. The exact distribution is governed by the declaration of division. However, individual agreements can be made for certain costs. For example, owners of a condominium on the first floor can be exempted from certain costs.

What do you need to know about the property expenses statement? You can find out everything you need to know in our blog article on the topic of house maintenance accounting.

These components of the house allowance are tax-deductible

The entire house allowance is not tax-deductible. However, you can deduct some of the expenses included in the house allowance from your tax bill under certain conditions. These include in particular

• Household-related services: Does your property management company commission companies to maintain the communal green areas, carry out caretaking activities or clean the stairwells? Then you can deduct some of these costs from your tax. You can claim up to 4,000 euros a year for household-related services.
• Handyman services: Are repairs or modernization work carried out on the common property, for example on the façade or the common rooms? In this case, you can deduct 20 percent of the pure labor costs, up to a maximum of EUR 1,200 per year.

How to declare house expenses in your tax return

To claim the house allowance for tax purposes, you must enter it in Annex V under income from renting and leasing. If you own several rented apartments, a separate Annex V must be created for each apartment. The expenses may not be combined. Separate recording makes it easier to track the income and expenses of each individual apartment.

Other costs that are tax-deductible in addition to the house allowance

In addition to the house allowance, there are other expenses that can have a positive impact on your tax burden. A distinction must be made here as to whether you use your condominium yourself or rent it out.

Special tax features for owner-occupied condominiums

If you own a condominium that you live in yourself, you primarily benefit from the fact that any services and tradesmen's work are tax-deductible. This primarily includes the household-related services and tradesmen's services already explained. Primarily relevant here are the labor costs incurred, for example, for maintaining your green spaces, cleaning work or repairs, such as hiring a chimney sweep. If you want to renovate your property to make it more energy efficient, you can claim the costs of an energy consultation against tax. These consultations are often a prerequisite for state subsidy programs.

An overview:

• Handyman services: Yes, tax-deductible, 20 percent of labor costs up to €1,200 per year
• Household-related services: Yes, tax-deductible, 20 percent of costs, up to €4,000 per year
• Fees for chimney sweeps: Yes, tax-deductible as part of household-related services
• Energy consultant costs: Yes, tax-deductible for energy-efficient refurbishment measures
• Insurance costs: Yes, tax-deductible, e.g. building insurance and household contents insurance
• Renovation and repair costs: Yes, tax-deductible, provided they contribute to maintenance and modernization. Major maintenance measures, such as a complete roof renovation, are generally not directly tax-deductible.
• Depreciation (AfA): Not tax-deductible
• Interest on real estate loans: not tax-deductible
• Service charges and operating costs: Not tax-deductible
• Travel costs to the property: Not tax-deductible

All items that can be deducted for tax purposes must be listed in Schedule H of your income tax return.

Deduct tax: Additional options for landlords

In the case of a rented condominium, the tax deductibility of the house allowance is even more extensive. As a landlord, you can deduct the following expenses from your tax bill in addition to those already mentioned:

• Handyman services: Yes, tax-deductible, up to 20 percent of labor costs (max. €1,200 per year)
• Energy consultant costs: Yes, tax-deductible as a business expense
• Service charges and operating costs: Service charges that you cannot pass on to the tenants of your condominium are generally deductible.
• Income-related expenses: These include all expenses incurred in connection with the rental of the condominium, such as interest on real estate loans, costs for repairs, maintenance measures and the management of the property.
• Depreciation: Yes, tax deductible. The acquisition costs for a property can be depreciated over a longer period of time. This is known as depreciation for wear and tear (AfA) and reduces the taxable profit.
• Travel expenses: Yes, tax deductible. If you regularly travel to the rented condominium, for example to carry out repairs or to look after the tenants, you can claim the travel costs as income-related expenses (flat rate of 30 cents/km for self-employed management)
• Insurance costs: Yes, tax-deductible, e.g. building insurance and household contents insurance
• Estate agent fees and costs for finding tenants: The costs for finding tenants and the associated advertising can be claimed for tax purposes.
• Household-related services: No, cannot be tax-deductible, as these are usually passed on to the tenants

These items are recorded as income-related expenses in Annex V (income from letting and leasing). Please note that reserves for future maintenance only become effective for tax purposes when they are actually used.

Common features for both forms of ownership

Regardless of whether you use your condominium yourself or rent it out to tenants, you can generally deduct the following costs from your taxes:

• Insurance costs: Insurance costs are incurred for both owner-occupied and rented condominiums, for example for building insurance or liability insurance.

In order to take advantage of all possible tax benefits, it is advisable to keep all relevant receipts carefully. This includes invoices, receipts and bank statements. For more complex matters, we recommend that you seek advice from a tax consultant.

Conclusion - tax-deductible house allowance brings advantages

As an owner, you have the advantage of being able to deduct part of the house rent from your taxes. This applies in particular to costs incurred for household-related services. These include, for example, garden maintenance, cleaning or minor repairs.

You can benefit in particular if you rent out your condominium. In this case, in addition to the services already mentioned, major expenses for maintenance and modernization of the common property can also be deducted from tax. You can also benefit from tax advantages if you use your apartment yourself. In this case, the costs of household-related services in particular are deductible. Major maintenance work, on the other hand, is generally not directly tax-deductible.

In conclusion, we can therefore say that you may be able to make considerable tax savings by correctly declaring your house allowance in your tax return.

Do you already know Ralph?

Are you looking for a property management company that offers more than just the management of your property and condominium? With Ralph, you not only get professional property management, but also comprehensive support with your property management fees.

We can help you to prepare your property tax statement in the best possible way and take all tax-relevant aspects into account. Thanks to our expertise in real estate and taxes, we can ensure that you take advantage of all possible tax benefits and avoid unnecessary payments. You can rely on our experience and know-how. We will prepare your property tax statement transparently, correctly and in accordance with the latest tax guidelines.

You can find all the important information about our services, extras and costs on our property management costs information page. Please contact us for a non-binding offer.