Home office in shared apartment
November 3, 2011 | 35,00 EUR | answered by Michael Herrmann
Hello,
I am a freelance engineer. I develop simulation software and conduct simulations for clients. I do this work in my home office. There are no other rooms where I work, and I am rarely at the client's location. So, the room is the center of my work.
The room is in an apartment that I have rented with my girlfriend. Both of our names are on the lease. I have calculated the costs for the home office proportionally and reported it on my income statement. Only I use the room.
The tax office now states on the income tax assessment that the costs for the home office can only be deducted by 50%, as the apartment is not rented and occupied solely by me. I would like to appeal against this decision. The costs for the room are my expenses!
My question:
Is the tax office correct? If so, where is this stated? How should I argue in my appeal? What are my chances of success?
Thank you.
Dear inquirer,
First of all, thank you for your inquiry, which I am happy to answer based on the information provided and in the context of your initial consultation. The response is based on the description of the situation. Missing or incorrect information regarding the actual circumstances can influence the legal outcome.
You can deduct the costs of the home office in full if you have incurred the costs and use the home office in accordance with tax regulations.
A division of costs would only be considered if the room was used by both parties. It can be assumed that the rental shares correspond to the respective living spaces used, and your partner does not enter into your living space due to the joint lease agreement.
There is little case law in this area, as the legal situation is generally clear. In an analogous application, I can provide you with two judgments regarding the deduction of costs for jointly owned property by spouses:
If you and your spouse are co-owners of the house or condominium in which you alone use a home office, you can still deduct all ongoing home office costs in full. You are not required to reduce the deduction by the spouse's share of ownership. (Federal Fiscal Court judgment of 23.8.1999, GrS 5/97, BStBl. 1999 II p. 774).
Justification: It is assumed here that the acquisition or construction costs of the house were borne in proportion to the co-ownership shares. It does not matter how much each individual actually contributed from their own funds. You are using your home office by your own right, provided that your share of ownership is at least as large as the home office portion of the living space (Federal Fiscal Court judgment of 23.8.1999, GrS 2/97, BStBl. 1999 II p. 782).
Regarding the topic of shared living arrangements, the Federal Fiscal Court confirms in its decision of 13.11.2007, Ref.: VI B 100/07, once again, that the prerequisite for deducting expenses for a home office according to § 9 (5) in conjunction with § 4 (5) sentence 1 No. 6b EStG is that the home office is used almost exclusively for professional purposes.
Even in a living situation characterized by a shared housing arrangement and relatively limited space for the core area of privacy, there may well be sufficient living space available for a home office. The exclusive use as a home office can also be confirmed by witnesses, without assuming that members of the shared housing arrangement are not telling the truth in their testimony.
I hope that these details provided in the context of your inquiry and this initial consultation have given you a sufficient overview of the situation, and remain
Yours sincerely
Michael Herrmann
Diploma in Financial Management
Tax advisor
