2nd residence
March 10, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Hello.
The following:
I was seconded by my employer from Düsseldorf to Lower Saxony in May 2010. At that time, my primary residence was in Düsseldorf. It was contractually agreed that I would be reimbursed for a housing allowance of up to €350 in Lower Saxony. The employer now pays €350 directly to the landlord monthly. At that time, my main residence was in Düsseldorf, so I commuted. I have now given up my apartment in Düsseldorf and am considering where to establish my main residence. The employer is aware of this change but wants to continue with the direct rent payment. My question is:
Do I need to declare this €350 as a taxable benefit in my tax return? Would it make sense to continue not declaring Lower Saxony as my primary residence, and what consequences would it have if I do declare it as such?
Thank you.
Kind regards,
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on the information provided and in the context of your situation as follows:
As long as you had your primary residence in Düsseldorf and a secondary residence in Lower Saxony, the conditions for a double household management were met through the secondment. This has tax consequences, as you can deduct the rental costs incurred for the secondary residence as business expenses from your income from non-self-employment, as long as the double household management exists. If the employer covers these rental costs as part of the double household management, this amount is considered tax-free income, and cannot be additionally deducted as business expenses. Therefore, this income was tax-free.
If you now move completely to Lower Saxony, that will become your main place of residence. The double household management no longer exists, and the employer's rental payment will be considered taxable income.
I hope this information was helpful to you.
Best regards,
Ulrich Stiller
Tax consultant/Diploma in Business Administration
