When a storm moves through the country, it often leaves behind more than just wet cellars and fallen trees. Many households then face expensive repairs. What many people don’t know is that certain costs can be deducted from taxes.
What damages are deductible
Damage caused by unavoidable events such as storms or floods are considered extraordinary burdens for tax purposes if they affect existentially important areas and are necessary to restore residential use. According to the German Press Agency, this includes in particular repairs to the house, the heating system or permanently installed inventory. Costs for luxury goods, gardens or vehicles are generally not deductible because they are not part of the living area that is essential to existence.
When the tax office recognizes the costs
For tax recognition, it is not sufficient that damage has occurred. The expenses must have been objectively necessary, must not have been avoidable and must not have been fully reimbursed by insurance or third parties. As the German Press Agency reports, full proof of the circumstances is required. This includes, among other things, invoices, photos, reports or confirmations from the insurance company.
Tax benefits for owners
Owners who live in the affected property can claim the costs as an extraordinary burden in accordance with Section 33 EStG. However, the tax effect only occurs when the so-called reasonable personal burden is exceeded, according to the NRW tax office.
The amount of this load limit depends on income, marital status and number of children. Anyone who replaces a simple window is usually within the specifications. However, if luxury equipment is chosen, this can lead to exclusion.
Tenants and their options
Tenants can also claim damages against tax if they had to pay for repairs themselves and these were necessary. This is possible, for example, if the landlord did not take action in time or the damage had to be repaired immediately through measures such as emergency pumps. According to information from t online.de, proof is required that no reimbursement was made and that the measure was in the interest of residential security. Here, too, tax consideration is taken within the framework of the extraordinary burdens.
Tax treatment when renting
Different rules apply to rented properties. Repairs and renovations in connection with storm damage can be reported as business expenses under rental and leasing income. In contrast to owner-occupied residential property, no personal expenses are deducted. According to energie-fachberater.de, larger measures such as roof renovation are also deductible as long as they serve the original condition and do not represent a luxury modernization.
Editorial team finanzen.net